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The  Tariff  History 


United  States 


A  SERIES  OF  ESSAYS 


BY 


F.  W.  TAUSSIG,  LL.B.,  Ph.D. 

ASSISTANT   PROFESSOR    OF   POLITICAL  ECONOMY   IN    HARVARD   UNIVERSITY 


NEW  YORK  &  LONDON 

G.   P.   PUTNAM'S     SONS 

%\i  Jittkhtrbocfur  ^ress 

1888 


'  T3 


COPYRIGHT  BV 

G.  P.  PUTNAM'S  SONS 


Press  of 

G.  P.  Putnam's  Sons 

New  York 


PREFATORY  NOTE. 


Of  the  papers  printed  in  this  volume  none  is  now  pre- 
sented to  the  public  for  the  first  time.     The  essay   on 
"  Protection   to   Young    Industries,    as   Applied    in   the 
United  States"  was  first  published  in  Cambridge  in  1882, 
and  was  republished  in  a  revised  edition  in  New  York  in 
1883.      The  paper  on  the  tariff  of  1828  appeared  in  the 
m     Political  Science  Quarterly  for  March,  1888.     That  on  the 
K      history  of  the  tariff  between  1830  and   i860,  was  printed 
§  S   in   the   Quarterly  Journal  of  Economics  for  April,   1888. 
§<*    The  "History  of  the   Present  Tariff  "  was  published  in 

^5    New  York  in  1885.      All,  however,  have  been  revised  for 

u  V 

2j  a    the  present  volume,  and  considerable  additions  have  been 

made.  Repetitions  have  been  avoided,  so  far  as  this 
was  possible,  and  I  have  attempted  to  connect  the  narra- 
tive of  the  separate  parts.  Although  not  originally 
written  with  the  design  of  presenting  a  complete  history 
of  our  tariff  legislation,  these  papers  cover  in  some  sort 
the  entire  period  from  1789  to  1887. 

F.  W.  Taussig. 

Cambridge,  Mass,  July,  1888. 


iii 


CONTENTS. 


Protection    to  Young    Industries   as  Applied    in 

the  United  States 1-67 

I. — The  Argument  in  General. — Conditions  under  Which  it 
Applies. — These  Conditions  Existed  in  the  United 
States  Early  in  the  Present  Century. — Probably  do 
Not  Now  Exist  .......       1-7 

II. — Industrial  History  of  the  Colonies  and  of  the  United 
States  before  1808. — Condition  of  Foreign  Trade. — 
Public  Opinion  on  Protection  and  the  Tariff  of  1789. 
— Restrictive  Measures  of  1808-1815  and  Their  Effect. 
— Tariff  of  1816. — Crisis  of  1818. — Manufacturers  in 
Better  Position  after  1819. — Strong  Protective 
Movement  Begins     .......     8-24 

III. — The  Cotton  Manufacture. — First  Factories. — Enormous 
Growth  after  1808. — Introduction  of  the  Power  Loom 
in  1816. — Minimum  Duties  of  1816.— Growth  after 
the  Crisis  of  1818. — Conclusion  as  to  the  Effect  of 
Protection  ........   25-36 

IV. — The  Woollen  Manufacture. — First  Factories. — Growth 
between  1808  and  1815. — Duties  between  1816  and 
1828. — Condition  of  the  Industry  after  1816. — Con- 
clusion as  to  the  Effect  of  Protection  .  .  .  37-45 
V. — The  Iron  Manufacture. — Condition  in  the  Colonies, 
Unchanged  after  1789. — Use  of  Coke  and  Invention 
of  Puddling  in  England. — No  Change  in  the  United 
States. — Duties  of  18 16  and  1818. — Discriminating 
Duty  on  Rolled  Bar-Iron. — Condition  of  the  Industry 
After  1816. — Conclusion  as  to  the  Effect  of  Pro- 
tection      .........  46-59 

VI. — Concluding  Remarks. — Effect  of  the  Restrictive  Period 
— 1808-1815. — Arguments  Used  during  the  Period 
under  Consideration. — New  Turn  of  the  Protective 
Controversy  after  1840  and  Appearance  of  the  Wages 
Argument  . 60-67 


VI  CONTENTS. 

The  Early  Protective  Movement  and  the  Tariff 

of  1828  . 68-108 

The  Early  Protective  Movement  Set  in  after  the  Crisis  of 
1819.— Its  Stronghold  in  the  Agricultural  States. — New  Eng- 
land Hesitates. — The  South  in  Opposition. — Tariff  Act  of 
1824. — Minimum  Duties.— Condition  of  the  Woollen  Manu- 
facture.— Wollens  Bill  of  1827  and  the  Minimum  System  on 
Woollens. — Harrisburg  Convention  of  1827. — The  Political 
Situation  and  the  Attitude  of  the  Adams  and  Jackson  Parties 
to  the  Tariff. — Congressional  Session  of  1827-28. — Bill  Pro- 
posed by  the  Jackson  Men. — Duties  on  Raw  Materials. — 
Duties  on  Woollens. — Object  of  the  Bill. — Passage  in  the 
House. — Passage  in  the  Senate. — Repeal  of  the  Act  by  the 
Tariff  of  1832. — The  Minimum  Duties  Abolished. — Treat- 
ment of  the  Act  by  Protectionist  Writers. 

The  Tariff — 1830-1860 109-154 

Tariff  Act  of  1832. — Compromise  Act  of  1833. — Act  of  1842. 
— Acts  of  1846  and  1857. — Crisis  of  1837. — Crisis  of  1857. — 
Revival  of  1843.— Crises  and  Tariffs.— The  Period  1846-60. 
— The  Duties  on  Iron. — Effect  on  Imports. — Rolled  Iron 
Duty. — Production  of  Iron  with  Anthracite. — Temporary 
Revival  of  Charcoal  Iron  after  1842,  and  Its  Ultimate  Dis- 
placement.— The  Cotton  Manufacture. — Its  Condition  in 
1833-40. — After  1842. — After  1846. — The  Woollen  Manu- 
facture.— Effect  of  Acts  of  1842  and  1846. — Carpets  and 
Hosiery. — Worsteds. — Effect  of  Free  Wool  after  1857. — 
Concluding  Remarks. 

The    History    of    the    Existing    Tariff — 1860- 

1888 155-266 

Chapter  I. —  The  War  Tariff 155 

The  Tariff  before  the  War.— The  Morrill  Tariff  of  1861.— 
Tax  and  Tariff  Act  of  1862.— Internal  Revenue  Act  of  1864. 
—Tariff  Act  of  1864.— Tariff  Act  of  1864  is  the  Basis  of  the 
Existing  Tariff. 

Chapter  II. —  The  Failure  to  Reduce  the  Tariff  after 

the  War 171 

Abolition  of  the  Internal  Taxes,  1866-72.— Failure  to  Reduce 


CONTENTS.  Vll 

the  Tariff.— Unsuccessful  Tariff  Bill  of  1867.—  Act  of  1870.— 
Situation  in  1S72. — Reform  Bill  in  the  House. — Ten  per  Cent. 
Reduction  Proposed. — Policy  of  Protectionists. — Act  of  1872. 
—  Repeal  of  Tea  and  Coffee  Duties,  1872. — Ten  per  Cent. 
Reduction  Repealed. 

Chapter    III. — How   Duties   were   Raised  above   the 

War  Rates  .  .  .         .  .         .         .  194 

Woollens  Act  of  1867. — The  Compensating  System. — Wool 
and  Woollens  Duties  of  1S64. — Act  of  1867. — Duty  on  Wool  ; 
on  Woollen  Cloths  ;  on  Flannels,  Carpets,  Dress  Goods. — 
Comment  on  the  ad-  Valorem  Duty. — Comment  on  the  Spe- 
cific Duties. — The  Woollens  Act  a  Heavy  Protective  Measure 
in  Disguise. — Doubtful  Effect  on  the  Manufacture. — Copper 
Act  of  1SC9. — Steel  Rails,  1870. — Marble,  1864-1870. — Other 
Cases  Where  Duties  were  Increased. — Character  of  These 
Measures. 

Chapter  IV.—  T/ie  Tariff  Act  of  1883        .         .         .230 

Tariff  Commission  of  1882. — Act  of  1S83  ;  How  Passed. — 
Duties  Raised  in  1883  :  Woollen  Dress  Goods,  Woollen  Cloths, 
Cottons,  Iron  Ore,  Steel,  Files  ;  Other  Articles. — This  In- 
crease in  Duties  not  Defensible — Duties  Reduced  in  1883: 
Wool,  Woollens,  Cottons,  Iron,  Steel  Rails,  Copper,  Other 
Articles. — Duties  on  Wheat,  Corn,  etc.,  Untouched. — General 
Character  of  the  Act. — Unsuccessful  Attempts  at  Legislation 
since  1883. 

Appendix — Tables  : 257 

I. — Imports  and  Duties,  1860-1887. 

II. — Duties  of  1861,  and  those  of  1864  which  were  retained, 
without  change,  till  18S3. 
III. — Duties  raised  after  the  war  above  the  rates  of  1864. 
IV. — Revenue  from  internal  taxes  and  from  the  tariff,  1860- 
1883. 
V. — Product,  Imports,  and  Foreign  and  Domestic  Prices  of 
Copper,  1875-18S6. 
VI. — Product,  Imports,  and  Foreign  and  Domestic  Prices  of 
Steel  Rails,  1871-1S87. 
VII. — Changes  in  Duties  by  the  Act  of  1883. 

Index      ..........     267 


PROTECTION  TO  YOUNG  INDUSTRIES  AS 
APPLIED  IN  THE  UNITED  STATES. 


I, 


THE  ARGUMENT  FOR  PROTECTION  TO   YOUNG 
INDUSTRIES. 

Of  the  arguments  in  favor  of  protection,  none  has 
been  more  frequently  or  more  sincerely  urged  than  that 
which  is  expressed  in  the  phrase  "  protection  to  young 
industries."  None  has  received  so  generally  the  approval 
of  economists,  even  of  those  little  disposed  to  acknowl- 
edge the  validity  of  any  reasoning  not  in  accordance  with 
the  theory  of  free  exchange.  Mill  gave  it  the  weight  of 
his  approval  in  a  passage  which  has  been  frequently  cited. 
Later  English  writers  have  followed  him  in  granting  its 
intrinsic  soundness.  The  reasoning  of  List,  the  most 
prominent  protectionist  writer  among  the  Germans,  is 
based,  so  far  as  it  is  purely  economic,  on  this  argument, 
and  since  List's  time  the  argument  has  taken  an  estab- 
lished place  in  German  treatises  on  political  economy, 
even  though  it  be  admitted  that  the  conditions  to  which 
it  fairly  applies  belong  to  the  past. 


2  PROTECTION  TO  YOUNG  INDUSTRIES. 

The  argument  is,  in  brief,  that  it  may  be  advantageous 
to  encourage  by  legislation  a  branch  of  industry  which 
might  be  profitably  carried  on,  which  is  therefore  sure  to 
be  carried  on  eventually,  but  whose  rise  is  prevented  for 
the  time  being  by  artificial  or  accidental  causes.  The 
essential  point  of  the  argument  lies  in  the  assumption 
that  the  causes  which  prevent  the  rise  of  the  industry, 
and  render  protection  necessary,  are  not  natural  and 
permanent  causes, — not  such  as  would  permanently  pre- 
vent, under  a  state  of  freedom,  the  growth  of  the  industry. 
Let  it  be  supposed,  for  instance,  that  the  industry  to  be 
encouraged  is  the  cotton  manufacture.  The  natural  ad- 
vantages of  a  given  country  for  making  cotton  cloths  are 
good,  we  may  suppose,  in  comparison  with  the  advantages 
for  producing  other  things.  The  raw  material  is  cheap, 
power  for  machinery  is  abundant,  the  general  intelligence 
and  industry  of  the  people — which,  since  they  admit  of 
but  very  slow  change,  must  be  considered  natural  advan- 
tages— are  such  as  to  fit  them  for  complex  industrial 
operations.  There  is  no  permanent  cause  why  cotton 
goods  should  not  be  obtained  at  as  low  cost  by  making 
them  at  home  as  by  importing  them  ;  perhaps  they  can 
even  be  produced  at  lower  cost  at  home.  But  the  cotton 
manufacture,  let  it  be  further  supposed,  is  new ;  the 
machinery  used  is  unknown  and  complicated,  and  re- 
quires skill  and  experience  of  a  kind  not  attainable  in 
other  branches  of  production.  The  industry  of  the 
country  runs  by  custom  in  other  grooves,  from  which  it 


THE  ARGUMENT  FOR  PROTECTION.  3 

is  not  easily  diverted.  If,  at  the  same  time,  the  com- 
munication of  knowledge  be  slow,  and  enterprise  be 
hesitating,  we  have  a  set  of  conditions  under  which  the 
establishment  of  the  cotton  manufacture  may  be  pre- 
vented, long  after  it  might  have  been  carried  on  with 
advantage.  Under  such  circumstances  it  may  be  wise  to 
encourage  the  manufacture  by  duties  on  imported  goods, 
or  by  other  analogous  measures.  Sooner  or  later  the 
cotton  manufacture  will  be  introduced  and  carried  on, 
even  without  assistance ;  and  the  government's  aid  will 
only  cause  it  to  be  established  with  less  friction,  and  at 
an  earlier  date,  than  would  otherwise  have  been  the  case. 
It  may  illustrate  more  clearly  the  conditions  under 
which  such  assistance  may  be  useful,  to  point  out  those 
under  which  it  is  superfluous.  The  mere  fact  that  an 
industry  is  young  in  years — has  been  undertaken  only 
within  a  short  period  of  time — does  not  supply  the  con- 
ditions under  which  protection  is  justified  by  this  argu- 
ment. An  industry  recently  established,  but  similar  in 
kind  to  other  branches  of  production  already  carried  on 
in  the  country,  would  hardly  come  within  its  scope.  But 
where  the  industry  is  not  only  new,  but  forms  a  departure 
from  the  usual  track  of  production ;  where,  perhaps,  ma- 
chinery of  an  entirely  strange  character,  or  processes 
hitherto  unknown,  are  necessary  ;  where  the  skill  and  ex- 
perience required  are  such  as  could  not  be  attained  in  the 
occupations  already  in  vogue  ;  under  these  circumstances 
protection  may  be  applied  with  good  results,  if  no  natural 


4  PROTECTION  TO  YOUNG  INDUSTRIES. 

disadvantages,  in  addition  to  the  artificial  obstacles,  stand 
in  the  way.  The  manufacture  of  linen  goods  in  the 
United  States,  at  the  present  time,  probably  supplies  an 
example  of  an  industry  which,  though  comparatively  new, 
can  hardly  be  said  to  deserve  protection  as  a  young  in- 
dustry. The  methods  and  machinery  in  use  are  not 
essentially  different  from  those  of  other  branches  of  tex- 
tile manufactures.  No  great  departure  from  the  usual 
track  of  production  is  necessary  in  order  to  make  linens. 
Manufacturers  of  the  same  general  character  are  estab- 
lished on  all  sides.  Work-people  and  managers  with 
experience  in  similar  work  can  be  easily  found.  Moreover, 
the  means  of  obtaining  and  communicating  knowledge 
at  the  present  time  are  such  that  information  in  regard  to 
the  methods  and  machinery  of  other  countries  can  be 
easily  obtained,  while  workmen  can  be  brought  from 
abroad  without  difficulty.  Those  artificial  obstacles  which 
might  temporarily  prevent  the  rise  of  the  industry  do 
not  exist,  and  it  may  be  inferred  that,  if  there  are  no 
permanent  causes  which  prevent  linens  from  being  made 
as  cheaply  in  the  United  States  as  in  other  countries,  the 
manufacture  will  be  undertaken  and  carried  on  without 
needing  any  stimulus  from  protecting  duties. 

There  are  two  sets  of  conditions  under  which  it  is  sup- 
posable  that  advantages  not  natural  or  inherent  may  be 
found  in  one  country  as  compared  with  another,  under 
which  causes  merely  temporary  and  accidental  may  pre- 
vent the  rise  of  certain  branches  of  industry  in  the  second 


THE  ARGUMENT  FOR  PROTECTION.  5 

country,  and  under  which,  therefore,  there  may  be  room 
for  the  application  of  protection.  These  are,  first,  the 
state  of  things  in  a  new  country  which  is  rapidly  growing 
in  population,  and  in  which,  as  population  becomes  more 
dense,  there  is  a  natural  change  from  exclusive  devotion 
to  the  extractive  industries  toward  greater  attention  to 
those  branches  of  production  classed  as  manufactures. 
The  transition  from  a  purely  agricultural  state  to  a  more 
diversified  system  of  industry  may  be  retarded,  in  the 
complete  absence  of  other  occupations  than  agriculture, 
beyond  the  time  when  it  might  advantageously  take 
place.  Secondly,  when  great  improvements  take  place  in 
some  of  the  arts  of  production,  it  is  possible  that  the  new 
process  may  be  retained  in  the  country  in  which  they 
originate,  and  may  fail  to  be  applied  in  another  country, 
through  ignorance,  the  inertia  of  habit,  and  perhaps  in 
consequence  of  restrictive  legislation  at  the  seat  of  the 
new  methods.  Here,  again,  the  obstacles  to  the  intro- 
duction of  the  new  industry  may  be  of  that  artificial  kind 
which  can  be  overcome  most  easily  by  artificial  means. 
Now,  both  these  sets  of  conditions  seem  to  have  been  ful- 
filled in  the  United  States  in  the  beginning  of  the  present 
century.  The  country  was  normally  emerging,  to  a  con- 
siderable extent,  from  that  state  of  almost  exclusive  devo- 
tion to  agriculture  which  had  characterized  the  colonies. 
At  the  same  time  great  changes  were  taking  place  in 
the  mechanical  arts,  and  new  processes,  hardly  known 
outside  of  England,  and  held  under  a  practical  monopoly 


6  PROTECTION   TO  YOUNG  INDUSTRIES. 

there,  were  revolutionizing  the  methods  of  manufacturing 
production.  Under  these  circumstances  there  would 
seem  to  have  existed  room  for  the  legitimate  application 
of  protection  for  young  industries. 

The  more  detailed  examination  in  the  following  pages 
of  the  industrial  condition  of  the  country  during  the  ear- 
lier part  of  this  century  will  bring  out  more  clearly  the 
reasons  why  protection  may  then  have  been  useful.  It  may 
be  well,  however,  to  notice  at  this  point  one  difference 
between  those  days  and  the  present  which  must  seriously 
affect  the  application  of  the  argument  we  are  considering. 
Even  if  we  were  to  suppose  the  conditions  of  1810  to 
exist  now ;  if  the  country  were  now  first  beginning  to 
attempt  manufactures,  and  if  a  great  revolution  in  manu- 
facturing industry  happened  to  make  the  attempt  pecu- 
liarly difficult ;  even  then  the  obstacles  arising  from  the 
force  of  custom,  and  from  the  want  of  familiarity  with 
new  processes,  would  be  much  more  easy  to  overcome 
now  than  sixty  years  ago.  The  ties  of  custom  in  industry 
have  become  much  loosened  in  the  last  half  century;  cap- 
ital and  labor  turn  more  easily  to  new  employments.  The 
railroad,  the  telegraph,  the  printing-press,  the  immense 
increase  in  the  facility  of  communication,  the  constant 
change  in  methods  of  production  in  all  industries,  have 
tended  to  make  new  discoveries  and  inventions  common 
property,  and  to  do  away  with  advantages  in  production 
based  on  other  than  permanent  causes.  It  is  true  that 
there  are  still  appreciable  differences  in  the  aits  of  pro- 


THE  ARGUMENT  FOR  PROTECTION.  J 

duction  in  different  countries,  and  that  some  may  have  a 
superiority  over  others  based  on  the  merely  accidental  or 
temporary  possession  of  better  processes  or  more  effective 
machinery.  But  the  United  States  hardly  lag  behind  in 
the  industrial  advance  of  the  present  day,  and  where  they 
do  labor  under  artificial  or  factitious  disadvantages,  these 
cannot  endure  long  or  be  of  great  consequence  under  a 
system  of  freedom. 

Sixty  years  ago,  however,  the  state  of  things  was 
very  different.  The  conditions  were  then  in  force  under 
which  protection  might  be  needed  to  enable  useful  indus- 
tries to  be  carried  on.  The  argument  for  protection  to 
young  industries  was  accordingly  the  most  effective  of 
those  urged  in  favor  of  the  protective  policy.  During 
the  twenty  years  which  followed  the  war  of  1812  the  pro- 
tective controversy  was  one  of  the  most  important  fea- 
tures in  the  political  life  of  the  nation ;  and  the  young 
industries  argument  was  the  great  rallying-cry  of  the  pro- 
tectionists. It  is  of  interest  to  examine  how  far  protec- 
tion of  the  kind  advocated  was  actually  applied,  and  how 
far  it  was  the  cause,  or  an  essential  condition,  of  that  rise 
of  manufactures  which  took  place.  The  object  of  this 
paper  is  to  make  such  an  investigation. 


II. 


THE   INDUSTRIAL  HISTORY  OF  THE  UNITED  STATES,  AND 
THE   COURSE   OF  PROTECTIVE  LEGISLA- 
TION,   FROM    1789  TO    1838. 

The  early  economic  history  of  the  United  States  may 
be  divided  into  two  periods.  The  first,  which  is  in  the 
main  a  continuation  of  the  colonial  period,  lasted  till  about 
the  year  1808  ;  the  embargo  marks  the  beginning  of  the 
series  of  events  which  closed  it.  The  second  began  in 
1808,  and  lasted  through  the  generation  following.  It 
was  during  the  second  period  that  the  most  decided  at- 
tempt was  made  to  apply  protection  to  young  industries 
in  the  United  States,  and  with  this  period  we  are  chiefly 
concerned. 

During  the  first  period  the  country  was,  on  the  whole, 
in  the  same  industrial  condition  in  which  the  colonies  had 
been.  The  colonies  had  been  necessarily  engaged  almost 
exclusively  in  agriculture,  and  in  the  occupations  closely 
connected  with  it.  The  agricultural  community  could 
not  get  on  without  blacksmiths,  carpenters,  masons,  shoe- 
makers, and  other  artisans,  and  these  existed  side  by  side 
with  the  farmers.     In  those  days,  it  must  be  remembered, 

8 


INDUSTRIAL  HISTORY  OF  THE  UNITED   STATES,     9 

handicraft  workmen  of  this  kind  occupied  a  more  import- 
ant place  in  industrial  organizations  than  they  do  at  the 
present  time.  They  made  many  articles  and  performed 
many  services  which  are  now  the  objects  of  manufacturing 
production  and  of  extensive  trade,  and  come  within  the 
range  of  international  dealings.  Many  tools  were  then 
made  by  individual  blacksmiths,  many  wares  by  the  car- 
penter, many  homespun  cloths  fulled  and  finished  at  the 
small  fulling-mill.  Production  of  this  kind  necessarily 
takes  place  at  the  locality  where  consumption  goes  on. 
In  those  days  the  division  of  labor  between  distant  bodies 
of  men  had  been  carried  out  to  a  comparatively  slight 
extent,  and  the  scope  of  international  trade  was  therefore 
much  more  limited.  The  existence  of  these  handicraft 
workmen  accounts  for  the  numerous  notices  of  "  manu- 
factures "  which  Mr.  Bishop  industriously  collected  in  his 
"  History  of  Manufactures,"  and  is  not  inconsistent  with 
the  mainly  extractive  character  of  the  industry  of  the 
colonies.  What  could  be  imported  at  that  time  was  im- 
ported, and  was  paid  for  by  the  exportation  of  agricul- 
tural produce.  The  exportation  took  place,  so  far  as  the 
northern  colonies  were  concerned,  largely  to  the  West 
Indies.  From  the  West  India  trade  the  means  for  pay- 
ing indirectly  for  the  imported  goods  were  mainly  ob- 
tained. There  were  some  important  exceptions  to  this 
general  state  of  things.  Ship-building  was  carried  on  to  a 
considerable  extent  in  New  England,  where  abundance  of 
material  and   the   necessity  of   transportation   by  water 


10  PROTECTION  TO  YOUNG  INDUSTRIES. 

made  such  an  industry  natural.  The  production  of  un- 
manufactured iron  was  carried  on  to  a  considerable  extent ; 
for  at  that  time  the  production  of  pig  and  bar  iron  tended 
to  fix  itself  in  those  countries  where  wood,  the  fuel  then 
used,  was  abundant,  and  was  therefore  an  industry  much 
more  analogous  to  agriculture  than  it  has  been  since  the 
employment  of  coal  as  fuel.  In  the  main,  however,  the 
colonies  made  only  such  manufactures  as  could  not  be  im- 
ported. All  manufactured  goods  that  could  be  imported 
were  not  made  at  home,  but  obtained  in  exchange  for 
agricultural  exports. 

This  state  of  things  was  little  changed  after  the  end  of 
the  Revolutionary  war  and  the  adoption  of  the  Constitu- 
tion. The  year  1789  marks  no  such  epoch  in  economic  as  it 
does  in  political  history.  Agriculture,  commerce,  and  the 
necessary  mechanic  arts,  continued  to  form  the  main  occu- 
pations of  the  people.  Such  goods  as  could  be  imported 
continued  to  be  obtained  from  abroad  in  exchange  for 
exports,  mainly  of  agricultural  produce.  The  range  of 
importable  articles  was,  it  is  true,  gradually  extending. 
Cloths,  linens,  and  textile  fabrics  were  still  chiefly  home- 
spun, and  fine  goods  of  this  kind  were  still  in  the  main 
the  only  textile  fabrics  imported.  But  with  the  great 
growth  of  manufacturing  industry  in  England  during  this 
time,  the  range  of  articles  that  could  be  imported  was 
growing  wider  and  wider.  During  the  Napoleonic  wars  the 
American  market  was  much  the  most  important  for  the 
newly  established  English  manufactures.     Large  quanti- 


INDUSTRIAL   HISTORY  OF  THE  UNITED   STATES,    II 

ties  of  cotton  and  woollen  goods  were  imported,  and  the 
importations  of  manufactures  of  iron,  in  regard  to  which 
a  similar  change  in  production  was  then  taking  place, 
also  increased  steadily.  Sooner  or  later  the  change  in  the 
course  of  production  which  was  going  on  in  England  must 
have  had,  and  did  have,  a  strong  influence  on  the  eco- 
nomic condition  of  the  United  States ;  but  for  the  time 
being  this  influence  was  little  felt,  and  the  country  con- 
tinued in  the  main  to  run  in  the  grooves  of  the  colonial 
period. 

This  absence  of  development  was  strongly  promoted  by 
the  peculiar  condition  of  the  foreign  trade  of  the  country 
up  to  1808.  The  wars  of  the  French  Revolution  opened 
to  this  country  profitable  markets  for  its  agricultural 
products  in  the  West  Indies  and  in  Europe,  and  profit- 
able employment  for  its  shipping,  both  in  carrying  the 
increased  exports  and  in  a  more  or  less  authorized  trade 
between  the  belligerent  countries  and  their  colonies.  For 
many  years  the  gains  arising  from  these  sources,  though 
not  regular  or  undisturbed,  were  great,  and  afforded  every 
inducement  to  remain  in  the  occupations  that  yielded 
them.  The  demand  for  agricultural  products  for  exporta* 
tion  to  the  belligerent  countries  and  their  colonies  was 
large,  and  the  prices  of  wheat,  corn,  and  meat  were  corre* 
spondingly  high.  The  heavy  exports  and  the  profits  on 
freights  furnished  abundant  means  for  paying  for  im- 
ported goods.  Importations  were  therefore  large,  and 
imported  goods  were  so  cheap  as  to  afford  little  induce- 


12 


PROTECTION   TO    YOUNG  INDUSTRIES. 


ment  for  engaging  in  the  production  of  similar  goods  at 
home.1 

The  tariff  legislation  of  this  period  was  naturally  much 
influenced  by  the  direction  taken  by  the  industries  of  the 

1  The  following  tables  of  imports  and  exports  show  the  influence 
of  these  circumstances  on  the  foreign  trade  of  the  country.  The  exports 
of  foreign  produce  show  the  swelling  of  the  carrying-trade.  The  price  of 
flour  shows  the  effect  on  the  prices  of  agricultural  produce.  The  influ- 
ence of  the  temporary  stoppage  of  the  war  in  Europe  during  the  time  of 
the  Peace  of  Amiens  is  clearly  seen. 


Year. 

Gross  Imports. 
000  Omitted. 

Gross  Exports. 
000  Omitted. 

Exports  of  For- 
eign  Produce. 

Price  of 
Flour 

000  Omitted 

per  Bbl. 

1791 

29,200 

19,000 

500 

.  .  . 

92 

31,500 

20, 700 

1,750 

$  5.07 

93 

31,100 

26,100 

2,100 

6.21 

94 

34,600 

33,000 

6,500 

7.22 

95 

69.750 

48,000 

8,500 

12.05 

96 

81,400 

67,000 

26,300 

12.43 

97 

75,400 

56,800 

27,000 

9.00 

98 

68,500 

61,500 

33,ooo 

8.78 

99 

79,000 

78,600 

45,5O0 

9.62 

1800 

91,200 

71,000 

39,100 

9.85 

01 

111,300 

94,000 

46,600 

10.45 

Peace  of  j  02 
Amiens.   \  03 

76,300 

72,000 

35,7oo 

6.75  1 

6.73  J" 

64,700 

55,8oo 

13,600 

04 

85,000 

77,7oo 

36,200 

8.22 

05 

120,600 

95,500 

53,200 

10.28 

06 

129,400 

101,500 

60,300 

7-30 

07 

138,500 

108,300 

59,600 

7.00 

08 

57,ooo 

22,400 

13,000 

5.60 

09 

59,400 

52,200 

20,800 

6.90 

10 

85,400 

66,700 

24,400 

9.66 

11 

53,400 

61,300 

16,000 

'O.OO 

12 

77,ooo 

38,500 

8,500 

P.7S 

13 

22,000 

27,900 

2,800 

8-  50 

14 

13,000 

6,900 

150 

7.70 

The  tables  of  imports  and  exports  are  from  the  Treasury  Reports.  The 
last  table,  giving  the  price  of  flour,  is  in  "  American  State  Papers,  Finale," 
III.,  536. 


INDUSTRIAL  HISTORY  OF  THE  UNITED   STATES.     1 3 

country.  The  peculiarly  favorable  conditions  under  which 
agriculture  and  commerce  were  carried  on  prevented  the 
growth  of  any  strong  feeling  in  favor  of  assisting  manufac- 
tures. Much  has  been  said  in  the  course  of  the  protective 
controversy  about  the  views  of  the  fathers  of  the  repub- 
lic. But  for  nearly  twenty  years  after  the  formation  of  the 
Union  other  subjects  so  absorbed  the  attention  of  public 
men  that  no  distinct  opinion  appears  in  their  utterances 
for  or  against  protective  duties.  Considering  the  state  of 
economic  knowledge  in  those  days,  the  example  set  by 
European  countries,  and  the  application  of  the  colonial 
system  before  the  days  of  independence,  we  cannot  be 
surprised  that  some  disposition  was  shown  to  impose  pro- 
tective duties.  It  is  curious  that  in  the  first  session  of 
Congress  these  were  advocated  most  earnestly  by  the 
representatives  from  Pennsylvania,  who  took  their  stand 
from  the  first  as  unflinching  advocates  of  a  protective 
policy.  On  the  other  hand,  the  current  toward  more  lib- 
eral views,  which  had  set  in  so  strongly  after  the  writings 
of  the  French  economists  and  the  publication  of  the 
"Wealth  of  Nations,"  had  made  its  way  to  the  United 
States.  One  might  expect  to  find  its  influence  most 
strong  among  the  followers  of  Jefferson,  whose  political 
philosophy  led  them  in  general  to  oppose  government 
interference.  But  both  Federalists  and  Republicans  were 
influenced  in  their  attitude  to  the  question  of  protection 
most  of  all  by  its  bearing  on  the  other  more  prominent 
questions  on  which  parties  began  to  be  divided. 


14  PROTECTION  TO  YOUNG  INDUSTRIES, 

Madison  had  maintained  the  principle  of  free  intercourse 
in  1789/  and  Jefferson  in  1787  had  extolled  the  virtues  of 
a  simple  agricultural  State.9  But  in  1793,  when  the  Fed- 
eralists and  Republicans  began  to  differ  on  questions  of 
foreign  policy,  and  especially  on  the  attitude  the  country 
should  take  in  the  wars  of  the  French  Revolution,  Jef- 
ferson advocated  vigorous  measures  of  protection  directed 
against  England,  and  Madison  brought  forward  a  set  of 
resolutions  based  on  his  recommendations.3  On  the  other 
hand,  Fisher  Ames  had  said,  in  1789,  that  the  general  gov- 
ernment should  nurture  those  industries  in  which  the 
individual  States  had  an  interest ;  but  in  1794,  when  his 
political  views  led  him  to  oppose  Madison's  resolutions, 
he  called  the  whole  theory  of  protection  an  exploded 
dogma.4  It  has  often  been  said  that  the  first  tariff  act, 
that  of  1789,  was  a  protective  measure,  and  that  in  the 
debate  on  it  the  protective  controversy  appeared  full- 
grown.  But  such  considerations  had  little  to  do  with  the 
act ;  and  the  discussions  on  protection  by  no  means  indi- 
cate what  was  the  real  centre  of  interest.5  The  act  was 
modelled  on  the  five  per  cent,  import  duty,  which  the 

1  "Annals  of  Congress,"  1789,  pp.  112-114. 

'  "  Notes  on  Virginia,  Works,"  VIII.,  404. 

8  See  Jefferson's  "  Report  on  Commerce,  Works,"  VII.,  637  ;  and  Madi- 
son's resolutions  of  1794,  based  on  Jefferson's  Report,  "Annals  of  Con- 
gress," 1794,  pp.  155,  209. 

4  "Annals  of  Congress,"  1789,  p.  221  ;  1794,  p.  342. 

*  It  is  significant,  for  example,  that  Madison's  letters  to  Jefferson,  then 
in  Paris,  about  the  debates  on  the  tariff  act  of  1789,  make  no  reference 
whatever  to  the  protective  discussion.     Madison's  "Works,"  I.,  466,  480. 


INDUSTRIAL  HISTORY  OF  THE  UNITED   STATES.     1 5 

Congress  of  the  Confederation  had  tried  in  vain  to  im- 
pose, and  its  main  object  was  to  secure  revenue  for  the 
new  government,  whose  successful  working  was  the  one 
end  which  all  the  legislation  of  the  first  few  years  sought 
to  bring  about.  The  general  level  of  duties  was  five  per 
cent,  on  the  value.  On  certain  articles  of  luxury,  higher 
ad  valorem  rates  were  fixed,  the  highest  being  fifteen  per 
cent,  on  carriages.  In  certain  specific  duties,  on  articles 
like  hemp,  cordage,  nails,  iron  manufactures,  and  glass, 
there  was  doubtless  an  intention  of  aiding  the  domestic 
producers.1  Some  of  these  articles  were  selected  because 
it  was  supposed  they  would  be  needed  in  time  of  war. 
On  others  it  is  not  unlikely  that  a  concession  to  protective 
demands  was  made  by  those  who  had  at  heart  the  success 
of  the  new  government,  in  order  to  insure  the  passage  of 
the  indispensable  revenue  act.2 

The  same  general  state  of  feeling  and  the  same  policy 
continued  during  the  twenty  years  following.  For  a  short 
time  after  1789,  it  maybe  possible  to  detect  a  drift  in 
favor  of  protective  duties,3  which  doubtless  was  strength- 


1  It  seems  to  have  been  understood  that  the  duties  on  these  articles  were 
made  specific  with  this  intention.  See  a  brief  report  by  Hamilton  in  his 
"Works,"  II.,  55. 

2  This  suggestion  is  made  in  Professor  H.  C.  Adams's  essay  on  "  Taxation 
in  the  United  States,"  1789-1816,  in  the  "Johns  Hopkins  University 
Studies,"  vol.  II.,  pp.  29,  30.  The  reader  who  wishes  further  information 
is  referred  to  this  excellent  monograph. 

3  A  number  of  committee  reports  on  petitions  for  higher  duties  are  printed 
in  "American  State  Papers,  Finance,"  vols.  I.,  II.  After  1794  the  reports 
are  generally  against  the  petitions. 


1 6  PROTECTION  TO   YOUNG  INDUSTRIES. 

ened  by  the  powerful  advocacy  of  protection  in  Hamil- 
ton's "  Report  on  Manufactures  "  (1792).  But  that  famous 
document  had  little,  if  any,  effect  on  legislation.  The 
moderate  policy  of  1789  was  maintained.  The  duties 
were  increased  from  time  to  time  as  more  revenue  was 
needed,  but  they  were  in  all  cases  moderate.  Those  which 
were  most  distinctly  protective  aimed  to  assist  industries 
which  already  had  a  good  foothold,  and  they  had  no 
appreciable  influence  in  diverting  the  industry  of  the 
country  into  new  channels.  No  action  at  all  was  taken 
for  the  encouragement  of  the  production  of  textiles,  of 
crude  iron,  and  of  the  other  articles  which  later  became  the 
great  subjects  of  dispute  in  the  protective  controversy. 

The  industrial  situation  changed  abruptly  in  1808, 
The  complications  with  England  and  France  led  to  a 
series  of  measures  which  mark  a  turning-point  in  the 
industrial  history  of  the  country.  The  Berlin  and  Milan 
decrees  of  Napoleon,  and  the  English  orders  in  Council, 
led,  in  December,  1807,  to  tne  Embargo.  The  Non- 
Intercourse  Act  followed  in  1809.  War  with  England 
was  declared  in  18 12.  During  the  war,  intercourse  with 
England  was  prohibited,  and  all  import  duties  were 
doubled.  The  last-mentioned  measure  was  adopted  in 
the  hope  of  increasing  the  revenue,  but  had  little  effect, 
for  foreign  trade  practically  ceased  to  exist.  This  series 
of  restrictive  measures  blocked  the  accustomed  channels 
of  exchange  and  production,  and  gave  an  enormous 
stimulus  to  those  branches  of  industry  whose  products 


INDUSTRIAL  HISTORY  OF  THE  UNITED   STATES.     If 

had  before  been  imported.  Establishments  for  the 
manufacture  of  cotton  goods,  woollen  cloths,  iron,  glass, 
pottery,  and  other  articles,  sprang  up  with  a  mushroom 
growth.  We  shall  have  occasion  to  refer  more  in  detail 
to  this  growth  when  the  history  of  some  of  these  manu- 
factures comes  to  be  considered  separately.  It  is  sufficient 
here  to  note  that  the  restrictive  legislation  of  1808-15 
was,  for  the  time  being,  equivalent  to  extreme  protection. 
The  consequent  rise  of  a  considerable  class  of  manufac- 
turers, whose  success  depended  largely  on  the  continuance 
of  protection,  formed  the  basis  of  a  strong  movement  for 
more  decided  limitation  of  foreign  competition. 

Some  signs  of  the  gradual  growth  of  a  protective  feeling 
appear  before  the  close  of  the  war.1  It  was  natural  that 
the  patriotic  fervor  which  the  events  of  the  period  of  re- 
striction and  war  called  out  for  the  first  time  in  our  his- 
tory, should  bring  with  it  a  disposition  to  encourage  the 
production  at  home  of  a  number  of  manufactured  articles, 
of  which  the  sudden  interruption  in  the  foreign  supply 
caused  great  inconvenience.  Madison,  whose  views  on 
this  subject,  as  on  others,  shifted  as  time  went  on  and 
circumstances  changed,  recommended  the  encouragement 
of  manufactures  ;  and  in  some  of  Clay's  earlier  speeches 
we  can  see  the  first  signs  of  the  American  system  of  the 

1  It  is  curious  to  note  that  in  1802-1804,  during  the  temporary  lull  that 
followed  the  Peace  of  Amiens,  the  committee  reports  seem  to  show  a  drift 
toward  protection.  See  "  American  State  Papers,  Finance,"  II.,  pp.  29,  80, 
and  the  report  on  the  Barbary  Powers  Act  of  1804,  "Annals  of  Congress," 
1804,  pp.  946-950. 


1 8  PROTECTION  TO  YOUNG  INDUSTRIES. 

future.1  The  feeling  in  favor  of  the  manufactures  that  had 
sprung  up  during  the  time  of  restriction  obtained  some 
clear  concessions  in  the  tariff  act  of  1816.  The  control 
of  the  policy  of  Congress  at  that  time  was  in  the  hands 
of  a  knot  of  young  men  of  the  rising  generation,  who  had 
brought  about  the  war  and  felt  in  a  measure  responsible 
for  its  results.  There  was  a  strong  feeling  among  these 
that  the  manufacturing  establishments  which  had  grown 
up  during  the  war  should  be  assisted.  There  was  little 
feeling,  however,  either  in  Congress  or  among  the  people, 
such  as  appeared  in  later  years,  in  favor  of  a  permanent 
strong  protective  policy.  Higher  duties  were  therefore 
granted  on  those  goods  in  whose  production  most  interest 
was  felt,  textile  fabrics  ;  but  only  for  a  limited  period. 
Cotton  and  woollen  goods  were  to  pay  25  per  cent,  till 
1 8 19;  after  that  date  they  were  to  pay  20  per  cent.  A 
proviso,  intended  to  make  more  secure  this  measure  of 
protection,  was  adopted  in  regard  to  a  minimum  duty  on 
cotton  goods,  to  which  reference  will  be  made  in  another 
connection.  These  and  some  other  distinctly  protective 
provisions  were  defended  by  Calhoun,  mainly  on  the 
ground  Of  the  need  of  making  provision  for  the  exigencies 
of  another  war ;  and  on  that  ground  they  were  adopted, 
and  at  the  same  time  limited.      The  general  increase  of 

1  See  Madison's  message  of  1809,  "Statesman's  Manual,"  I.,  289  ;  and 
Clay's  speech  of  1810,  "Works,"  I.,  195.  Madison  never  gave  up  his 
general  acceptance  of  the  principle  of  free  trade,  but  admitted  it  to  be 
inapplicable  to  articles  needed  in  time  of  war,  and  in  circumstances  to 
which  the  young-industries'  argument  applied.    See  his  "  Works,"  III.,  42. 


INDUSTRIAL  HISTORY  OF  THE  UNITED  STATES.    1 9 

duties  under  the  act  of  18 16,  to  an  average  of  about 
twenty  per  cent.,  was  due  to  the  necessity  of  providing 
for  the  payment  of  the  interest  on  the  heavy  debt  con- 
tracted during  the  war. 

For  some  time  after  the  close  of  the  war  and  the 
enactment  of  the  tariff  of  18 16,  there  was  no  pressure  for 
a  more  vigorous  application  of  protective  principles.  The 
general  expectation  was,  that  the  country  would  fall  back 
into  much  the  same  state  of  things  as  that  which  had  ex- 
isted before  1808  ;  that  agriculture  and  commerce  would 
again  be  as  profitable  as  during  the  previous  period,  and 
would  be  as  exclusively  the  occupations  of  the  people. 
Such  an  expectation  could  not  in  the  nature  of  things  be 
entirely  fulfilled,  but  for  a  time  it  was  encouraged  by 
several  accidental  circumstances.  The  harvests  in  Europe 
for  several  seasons  were  bad,  and  caused  a  stronger  de- 
mand and  higher  price  for  the  staple  food  products.  The 
demand  for  cotton  was  large,  and  the  price  high.  Most 
important  of  all,  the  currency  was  in  a  state  of  complete 
disarrangement,  and  concealed  and  supported  an  unsound 
economic  condition.  Under  cover  of  the  excessive  issues 
of  practically  irredeemable  bank-notes,  the  prices  of  all 
commodities  were  high,  as  were  the  general  rates  of  wages 
and  rents.  The  prices  of  bread-stuffs  and  provisions,  the 
staples  of  the  North,  and  of  cotton  and  tobacco,  the 
staples  of  the  South,  were  high,  not  only  absolutely,  but 
relatively,  and  encouraged  continued  large  production 
of   these   articles.      The   prices   of    most    manufactured 


20  PROTECTION  TO  YOUNG  INDUSTRIES. 

goods  were  comparatively  low.  After  the  war  the  im- 
ports of  these  from  England  were  very  heavy.  The  long 
pent-up  stream  of  English  merchandise  may  be  said  to 
have  flooded  the  world  at  the  close  of  the  Napoleonic  wars. 
In  this  country,  as  in  others,  imports  were  carried  beyond 
the  capacity  for  consumption,  and  prices  fell  much  below 
the  normal  rates.  The  strain  of  this  over-supply  and 
fall  of  prices  bore  hard  on  the  domestic  manufacturers, 
especially  on  those  who  had  begun  and  carried  on  opera- 
tions during  the  restrictive  period  ;  and  many  of  them  were 
compelled  to  cease  production  and  to  abandon  their  works. 
This  abnormal  period,  which  had  its  counterpart  of 
feverish  excitement  and  speculation  in  Europe,  came  to 
an  end  in  18 18-19.  The  civilized  world  then  settled 
down  to  recover  slowly  from  the  effects  of  a  generation 
of  war  and  destruction.  In  the  United  States  the  cur- 
rency bubble  was  pricked  in  the  latter  part  of  18 18. 
Prices  began  to  fall  rapidly  and  heavily,  and  continued  to 
fall  through  18 19.  The  prices  of  the  agricultural  staples 
of  the  North  and  South  underwent  the  greatest  change, 
for  the  harvests  in  Europe  were  again  good  in  18 18,  the 
English  corn-laws  of  18 16  went  into  operation,  and  the 
demand  for  cotton  fell  off.  A  new  scale  of  monetary  ex- 
change gradually  went  into  operation.  During  the  period 
of  transition  there  was,  as  there  always  is  in  such  periods, 
much  suffering  and  uneasiness  ;  but  gradually  the  difficul- 
ties of  adjusting  old  contracts  and  engagements  were 
overcome,  and  the  habits  of  the  people  accommodated 


INDUSTRIAL  HISTORY  OF  THE  UNITED   STATES.    21 

themselves  to  the  new  regime.  Within  three  or  four 
years  after  1819  the  effects  of  the  crash  were  no  longer 
felt  in  most  parts  of  the  country. 

Two  results  which  it  is  important  to  note  in  this  con- 
nection followed  from  the  crisis  of  18 19:  first,  a  great 
alteration  in  the  position  and  prospects  of  manufacturing 
industries;  and  second,  the  rise  of  a  strong  public  feeling 
in  favor  of  protecting  these  industries,  and  the  final  en- 
actment of  legislation  for  that  purpose.  The  first  of 
these  results  was  due  primarily  to  the  fact  that  the  fall  in 
prices  after  18 19  did  not  so  greatly  affect  most  manufac- 
tured goods  as  it  did  other  articles.  The  prices  of  manu- 
factured goods  had  already  declined,  in  consequence  of 
the  heavy  importations  in  the  years  immediately  follow- 
ing the  war.  When,  therefore,  the  heavy  fall  took  place 
in  1 8 19  in  the  prices  of  food  and  of  raw  materials,  in  the 
gains  of  agriculture,  in  money  wages  and  money  rents, 
the  general  result  was  advantageous  for  the  manufacturers. 
They  were  put  into  a  position  to  produce  with  profit  at 
the  lower  prices  which  had  before  been  unprofitable,  and 
to  meet  more  easily  foreign  competition.  After  the  first 
shock  was  over,  and  the  system  of  exchange  became 
cleared  of  the  .confusion  and  temporary  stoppage  which 
must  attend  all  great  fluctuations  in  prices,  this  result 
was  plainly  felt.1     It  is  easy  to  see  that  the  whole  process 

1  "  The  abundance  of  capital,  indicated  by  the  avidity  with  which  loans 
are  taken  at  the  reduced  rate  of  five  per  cent.,  the  reduction  in  the  wages  of 
labor,  and  the  decline  in  the  price  of  property  of  all  kinds,  all  concur  favor- 
ably for  domestic  manufactures." — Clay,  Speech  of  1820.   "  Works,"  I.,  419. 


22  PROTECTION  TO   YOUNG  INDUSTRIES.  ,\. 

was  nothing  more  than  the  evolution  of  the  new  state  of 
things  which  was  to  take  the  place  of  that  of  the  period 
before  1808.  In  that  earlier  period  manufactured  goods, 
so  far  as  they  could  be  obtained  by  importation  at  all, 
were  imported  cheaply  and  easily  by  means  of  large  ex- 
ports and  freight  earnings.  These  resources  were  now 
largely  cut  off.  Exports  declined,  and  imports  in  the  end 
had  to  follow  them.  The  tightening  of  the  English 
corn-law,  and  the  general  restriction  of  trade  and  naviga- 
tion by  England  and  other  countries,  contributed  to 
strengthen  this  tendency,  and  necessarily  served  to  stimu- 
late the  growth  of  manufactures  in  the  United  States. 
That  growth  was  indeed  complicated  and  made  more 
striking  by  the  revolution  which  was  then  taking  place  in 
many  departments  of  manufacturing  industry.  Especially 
in  the  production  of  textile  fabrics,  machinery  was  rapidly 
displacing — in  England  had  already  largely  displaced — 
production  by  hand  on  a  small  scale.  Home-spun  textiles 
were  gradually  making  room  for  the  products  of  the  spin- 
ning-jenny and  the  power-loom.  The  state  of  things  that 
followed  the  crisis  of  18 18-19  was  favorable  to  the  rise  of 
manufactures ;  but  the  change  took  place  not  so  much  by 
an  increase  in  the  relative  number  of  persons  engaged  in 
such  occupations,  as  in  the  substitution  of  manufactures 
in  the  modern  sense  for  the  more  simple  methods  of  the 
previous  period.1 

1  According  to  the  census  returns  of  1820  and   1840,  the  only  two  of  the 
earlier  returns  in  which  occupations  are  enumerated,  there  were  engaged 


INDUSTRIAL   HISTORY  OF    THE     UNITED   STATES.      23 

The  second  effect  of  the  change  that  followed  the 
financial  crisis  of  18 19,  was  the  strong  protective  move- 
ment which  exercised  so  important  an  influence  on  the 
political  history  of  the  next  generation.  The  diminution 
of  the  foreign  demand,  and  the  fall  in  the  prices  of  staple 
products,  naturally  gave  rise  to  a  cry  for  a  home  market. 
The  absence  of  reciprocity  and  the  restrictive  regulations 
of  England,  especially  in  face  of  the  comparatively  liberal 
import  duties  of  this  country,  furnished  an  effective  argu- 
ment to  the  advocates  of  protection.  Most  effective,  -how- 
ever, was  the  argument  for  protection  to  young  industries, 
which  was  urged  with  persistency  during  the  next  ten  or 

in  manufactures  and  the  mechanic  arts  in  1820,  13.7  per  cent,  of  the  work- 
ing population  ;  in  1840,  17  1  per  cent.     In  New  England    21    per  cent, 
were  so  engaged  in  1820,  30.2  per  cent,  in  1840  ;  in  the  Middle  States  22.6 
percent,  in  1820,  28  per  cent,  in  1840.    Mac  Gregor,  "  Progress  of  America," 
II.,  101.      There  are  no  census  figures  before  1820.     In  1807  it  was  loosely 
estimated  that  out  of  2,358,000  persons    actively  employed,   230,000  were 
engaged  in  mechanics  and  manufactures — less  than  10  per  cent.     Blodgett, 
"  Thoughts  on  a  Plan  of  Economy,"  etc.   [1807]  p.  6. 

The  fluctuations  in  the  exports  of  wheat  flour,  which  was  the  most  im- 
portant article  of  export  among  agricultural  products  during  the  early  part 
of  the  century,  tell  plainly  the  story  of  the  country's  foreign  trade.     They 
were  as  follows,  the  figures  indicating  millions  of  dollars  : 

Yearly  average,   1S03-7  (expanded  trade)      .         .         .  .8.2 

"  "  1808-10  (restriction)  .....       4.0 

"  "  1810-12  (restrictions  removed)    .  .     13.5 

1813-15  (war)     .  .  .         .  .      ...       5-5 

"  "         1816-17  (temporary  revival)        .  .  .     14.5 

Year  1818 .      6.0 

"      1819  .         .         .         .         .         .         .       5.0 

"      1820 4-3 

During  the  decade  1820-1830,  when  matters  settled  down  to  a  normal 
state,  the  yearly  export  was  between  four  and  five  millions  of  dollars.  See 
"Quarterly  Reports  of  the  Bureau  of  Statistics,"  1883-84,  No.  4,  pp.  523, 
524. 


24  PROTECTION  TO  YOUNG  INDUSTRIES. 

fifteen  years.  The  character  and  history  of  this  early  pro- 
tective movement  will  be  discussed  elsewhere.1  Here  it  is 
sufficient  to  note  that  its  effect  on  legislation  was  not 
merely  to  maintain  the  protective  provisions  of  the  tariff 
of  1816,  but  much  to  extend  the  protective  element  in 
tariff  legislation.  Already  in  18 18  it  had  been  enacted 
that  the  duty  of  25  per  cent,  on  cottons  and  woollens 
should  remain  in  force  till  1826,  instead  of  being  reduced 
to  20  per  cent,  in  18 19,  as  had  been  provided  by  the  act  of 
1816.  At  the  same  time  the  duty  on  all  forms  of  unman- 
ufactured iron  was  considerably  raised  ;  a  measure  to 
which  we  shall  have  occasion  to  refer  in  another  connec- 
tion. In  1820,  while  the  first  pressure  of  the  economic 
revulsion  bore  hard  on  the  people,  a  vigorous  attempt 
was  made  to  pass  a  high  protective  tariff,  and  it  barely 
failed  of  success,  by  a  single  vote  in  the  Senate.  In  1824 
the  protectionists  succeeded  in  passing  the  tariff  of  that 
year,  which  increased  all  duties  considerably.  Four  years 
later,  in  the  tariff  of  1828,  the  protective  movement 
reached  its  highest  point.  The  measures  which  followed 
in  1832  and  1833  moderated  the  peculiarly  offensive  pro- 
visions of  the  act  of  1828,  but  retained  the  essential  parts 
of  protection  for  some  years  longer.  On  the  whole,  from 
1 8 16  on,  there  was  applied  for  some  twenty  years  a  con- 
tinuous policy  of  protection  ;  for  the  first  eight  years  with 
much  moderation,  but  after  1824  with  high  duties,  and 
stringent  measures  for  enforcing  them. 

1  In  the  next  essay,  pp.  68-75. 


III. 


THE  COTTON   MANUFACTURE. 

We  turn  now  to  the  history  of  some  of  the  industries 
to  which  protection  was  applied  during  this  long  period, 
in  order  to  determine,  so  far  as  this  is  possible,  how  far 
their  introduction  and  early  growth  were  promoted  or 
rendered  possible  by  protection.  We  shall  try  to  see  how 
far  and  with  what  success  protection  to  young  industries 
was  applied.  The  most  important  of  them,  on  account 
both  of  its  magnitude  and  of  the  peculiarly  direct  applica- 
tion of  protection  to  it,  is  the  cotton  manufacture  ;  and 
we  are  fortunate  in  having,  at  the  same  time,  the  fullest 
and  most  trustworthy  accounts  of  the  early  history  of 
this  industry.1 

During  the  first  of  the  two  periods  into  which  we  have 
divided  the  early  economic  history  of  the  United  States, 
several  attempts  were  made  to  introduce  the  manufacture 
of  cotton  by  the  machinery  invented  by  Hargreaves  and 
Arkwright  in  the  latter  part  of  the  18th  century.     One  or 

1  In  S.  Batchelder's  "  Introduction  and  Early  Progress  of  the  Cotton  Man- 
ufacture in  the  U.  S."  (1863)  ;  G.  S.  White's  "  Memoir  of  Samuel  Slater  " 
(1836)  ;  and  N.  Appleton's  "  Introduction  of  the  Power-loom  and  Origin 
of  Lowell "  (1858). 

25 


26  PROTECTION  TO   YOUNG  INDUSTRIES. 

two  of  these  attempts  succeeded,  but  most  of  them  failed, 
and  the  manufacture,  which  then  was  growing  with  marvel- 
lous rapidity  in  England,  failed  to  attain  any  considerable 
development  in  this  country.  In  1787  a  factory  using  the 
new  machinery  was  established  at  Beverly,  Mass.,  and 
obtained  aid  from  the  State  treasury  ;  but  it  was  soon 
abandoned.  Similar  unsuccessful  ventures  were  made 
at  Bridgewater,  Mass.,  Norwich,  Conn.,  and  Pawtucket, 
R.  I.,  as  well  as  in  Philadelphia.  The  spinning-jenny  was 
introduced  in  all  these,  but  never  successfully  operated.1 
The  first  successful  attempt  to  manufacture  with  the  new 
machinery  was  made  by  Samuel  Slater,  at  Pawtucket, 
R.  I.  Slater  was  a  workman  who  had  been  employed  in 
Arkwright's  factories  in  England.  He  joined  to  mechani- 
cal skill  strong  business  capacity.  He  had  become  famil- 
iar with  the  system  of  carding,  drawing,  roving,  and  mule- 
spinning.  Induced  to  come  to  the  United  States  in  1798 
by  prizes  offered  by  the  Philadelphia  Society  for  Promot- 
ing Manufactures,  he  took  charge  in  the  following  year  of 
a  cotton-factory  which  had  been  begun  and  carried  on  with 
little  success  by  some  Quakers  of  Pawtucket.  He  was  suc- 
cessful in  setting  up  the  Arkwright  machinery,  and  became 
the  founder  of  the  cotton  manufacture  in  this  country. 
Through  him  machinery,  and  instruction  in  using  it,  were 
obtainable ;  and  a  few  other  factories  were  begun  under 

1  Batchelder,  p.  26  seq.;  White,  ch.  III.  The  cotton-mill  at  Norwich, 
built  in  1790,  was  operated  for  ten  years,  and  then  abandoned  as  unprofit- 
able.— Caulkins,  "  Hist,  of  Norwich,"  p.  696. 


THE   COTTON  MANUFACTURE.       .  2J 

his  superintendence.  Nevertheless,  the  manufacture: 
hardly  maintained  its  hold.  In  1803  there  were  only  four 
factories  in  the  country.'  The  cotton  manufacture  was  at 
that  time  extending  in  England  at  a  rapid  rate,  and  the 
imports  of  cotton  goods  from  England  were  large.  The 
Treasury  reports  of  those  days  give  no  separate  statements 
of  the  imports  of  cotton  goods;  but  in  1807  **  was  esti- 
mated that  the  imports  of  cotton  goods  from  England 
amounted  to  eleven  million  dollars'  worth— a  very  large 
sum  for  those  days.2  The  consumption  of  cotton  goods 
was  large  ;  but  only  an  insignificant  part  of  it  was  supplied 
by  home  production,  although  later  developments  showed 
that  this  branch  of  industry  could  be  carried  on  with  dis- 
tinct success.  The  ease  with  which  these  imports  were 
paid  for,  and  the  stimulus  which  this  period,  as  described 
in  the  preceding  pages,  gave  to  agriculture  and  com- 
merce, account  in  part  for  the  slowness  with  which  the 
domestic  manufacture  developed.  The  fact  that  raw  cot- 
ton Was  not  yet  grown  to  any  considerable  extent  in  the 
country,  together,  doubtless,  with  the  better  machinery 
and  larger  experience  and  skill  of  the  English,  account  for 
the  rest. 

When,  however,  the  period  of  restriction  began,  in 
1808,  the  importation  of  foreign  goods  was  first  impeded, 
and  soon  entirely  prevented.  The  domestic  manufacture 
accordingly  extended  with  prodigious  rapidity.     Already 

bishop,  "  Hist,  of  Manufactures,"  II.,  102. 

2  See  the  pamphlet  by  Blodgett  "  On  a  Plan  of  Economy,"  etc.,  already 
cited,  p.  26. 


28  PROTLL'IWN  70  YOUNG  INDUSTRIES. 

during  the  years  1804-8  greater  activity  must  have  pre- 
vailed ;  for  in  the  latter  year  fifteen  mills  had  been  built 
running  8,000  spindles.  In  1809  tne  number  of  mills 
built  shot  up  to  62,  with  31,000  spindles,  and  while  25 
more  mills  were  in  course  of  erection.1  In  1812  there 
were  50  factories  within  thirty  miles  of  Providence,  operat- 
ing nearly  60,000  spindles,  and  capable  of  operating  100,- 
OOO.2  During  the  war  the  same  rapid  growth  continued, 
rendered  possible  as  it  was  by  the  increasing  supply  of 
raw  cotton  from  the  South.  The  number  of  spindles  was 
said  to  be  80,000  in  181 1,  and  500,000  in  181 5.  In  1800, 
500  bales  of  cotton  had  been  used  ;  in  1805,  i»000  bales. 
In  1810  the  number  consumed  rose  to  10,000;  in  1815, 
it  was  90,000.'     These  figures  cannot  be  supposed  to  be 

1  Gallatin's  Report  on  Manufactures  in  18 10  ;  "  Amer.  State  Papers, 
Finance,"  II.,  427. 

2  "  White  :   "  Memoir  of  Slater,"  p.  188. 

3  See  the  Report  of  a  Committee  of  Congress  on  the  Cotton  Manufacture 
in  1816  ;  "  Amer.  State  Papers,  Finance,"  III,  82,  F4.  This  estimate  re- 
fers only  to  the  cotton  consumed  in  factories,  and  does  not  include  that  used 
in  household  manufacture.  The  number  of  spindles  for  1815,  as  given  in 
this  report,  is  probably  much  too  large.  In  Woodbury's  Report  of  1S36  on 
cotton,  the  number  of  spindles  in  use  in  factories  is  given  as  follows  : 

In  1805         .         .  4,500  spindles. 

"   1807         .         .  8,000        " 

"   1809         .         .  31,000        " 

"   1810         .         .  87,000        " 

"   1815         .         .  130,000        " 

"   1820         .  .         220,000        " 

"   1821         .         .         230,000        " 

"   1825         .         .         800,000        " 
"Exec.  Doc,"  1  Sess.,  24  Congr  ,  No.  146,  p.  51.     It  need  not  be  said 
that  these  figures  are  hopelessly  loose  ;  but  they  are  sufficient  to  support 
the  general  assertions  of  the  text. 


THE   COTTON  MANUFACTURE.  20/ 

at  all  accurate ;  but  they  indicate   clearly  an  enormously 
rapid  development  of  the  manufacture  of  cotton. 

The  machinery  in  almost  all  these  new  factories  was  for 
spinning  yarn  only.  Weaving  was  still  carried  on  by  the 
hand-loom,  usually  by  weavers  working  in  considerable 
numbers  on  account  for  manufacturers.  Toward  the  end 
of  the  war,  however,  a  change  began  to  be  made  almost 
as  important  in  the  history  of  textile  manufactures  as  the 
use  of  the  spinning-jenny  and  mule :  namely,  the  substitu- 
tion of  the  power-loom  for  the  hand-loom.  The  introduc- 
tion of  the  power-loom  took  place  in  England  at  about 
the  same  time,  and  some  intimation  of  its  use  seems  to 
have  reached  the  inventor  in  this  country,  Francis  C. 
Lowell.  He  perfected  the  machine,  however,  without  any 
use  of  English  models,  in  the  course  of  the  year  1814.  In 
the  same  year  it  was  put  in  operation  at  a  factory  at 
Waltham,  Mass.  There  for  the  first  time  the  entire  pro- 
cess of  converting  cotton  into  cloth  took  place  under  one 
roof.  The  last  important  step  in  giving  textile  manufac- 
tures their  present  form  was  thus  taken.1 

When  peace  was  made  in  181 5,  and  imports  began 
again,  the  newly  established  factories,  most  of  which  were 
badly  equipped  and  loosely  managed,  met  with  serious 
embarrassment.  Many  were  entirely  abandoned.  The 
manufacturers  petitioned  Congress  for  assistance;  and 
they  received,  in  18 16,  that  measure  of  help  which  the 
public  was  then  disposed  to  grant.     The  tariff  of    1816 

'Appleton,  pp.  7-1  r  ;  Batchelder,  pp.  60-70. 


30  PROTECTION  TO  YOUNG  INDUSTRIES. 

levied  a  duty  of  25  per  cent,  on  cotton  goods  for  three 
years,  a  duty  considered  sufficiently  protective  in  those 
days  of  inexperience  in  protective  legislation.  At  the 
same  time  it  was  provided  that  all  cotton  cloths,  costing 
less  than  25  cents  a  yard,  should  be  considered  to  have 
cost  25  cents  and  be  charged  with  duty  accordingly ;  that 
is,  should  be  charged  25  per  cent,  of  25  cents,  or  6J-  cents 
a  yard,  whatever  their  real  value  or  cost.  This  was  the 
first  of  the  minimum  valuation  provisos  which  played  so 
considerable  a  part  in  later  tariff  legislation,  and  which 
have  been  maintained  in  large  part  to  the  present  time.  A 
similar  minimum  duty  was  imposed  on  cotton-yarns.1  At 
the  time  when  these  measures  were  passed,  the  minimum 
provisos  hardly  served  to  increase  appreciably  the  weight 
of  the  duty  of  25  per  cent.  Coarse  cotton  cloths  were 
then  worth  from  25  to  30  cents,  and,  even  without  the 
provisos,  would  have  paid  little,  if  any  thing,  less  than  the 
minimum  duty.  But,  after  1818,  the  use  of  the  power- 
loom,  and  the  fall  in  the  price  of  raw  cotton,  combined 
greatly  to  reduce  the  prices  of  cotton  goods.  The  price 
of  coarse  cottons  fell  to  19  cents  in  1819,  13  cents  in 
1826,  and  8|-  cents  in  1829.2  The  minimum  duty  became 
proportionately  heavier  as  the  price  decreased,  and,  in  a 
few  years  after  its  enactment,  had  become  prohibitive  of 
the  importation  of  the  coarser  kinds  of  cotton  cloths. 

1  The  minimum  system  seems  to  have  been  suggested  by  Lowell.  Apple- 
ton,  p.  13.  Compare  Appleton's  speech  in  Congress  in  1833. — "Congres- 
sional Debates,"  IX.,  1213. 

2  Appleton,  pr  16. 


THE   COTTON  MANUFACTURE.  3 1 

During  the  years  immediately  after  the  war,  the  aid 
given  in  the  tariff  of  1816  was  not  sufficient  to  prevent 
severe  depression  in  the  cotton  manufacture.  Reference 
has  already  been  made  to  the  disadvantages  which,  under 
the  circumstances  of  the  years  181 5-18,  existed  for  all 
manufacturers  who  had  to  meet  competition  from  abroad. 
But  when  the  crisis  of  1818-19  had  brought  about  a  re- 
arrangement of  prices  more  advantageous  for  manufac- 
turers, matters  began  to  mend.  The  minimum  duty  became 
more  effective  in  handicapping  foreign  competitors.  At 
the  same  time  the  power-loom  was  generally  introduced. 
Looms  made  after  an  English  model  were  introduced  in 
the  factories  of  Rhode  Island,  the  first  going  into  opera- 
tion in  1817  ;  while  in  Massachusetts  and  New  Hampshire 
the  loom  invented  by  Lowell  was  generally  adopted  after 
1816.1  From  these  various  causes  the  manufacture  soon 
became  profitable.  There  is  abundant  evidence  to  show 
that  shortly  after  the  crisis  the  cotton  manufacture  had 
fully  recovered  "from  the  depression  that  followed  the 
war.2     The  profits  made  were  such  as  to  cause  a  rapid 

1  Appleton,  p.  73  ;  Batchelder,  pp.  70-73. 

2  The  following  passage,  referring  to  the  general  revival  of  manufactures, 
may  be  quoted  :  "  The  manufacture  of  cotton  now  yields  a  moderate  profit 
to  those  who  conduct  the  business  with  the  requisite  skill  and  economy. 
The  extensive  factories  at  Pawtucket  are  still  in  operation.  ...  In  Phil- 
adelphia it  is  said  that  about  4,000  looms  have  been  put  in  operation  within 
the  last  six  months,  which  are  chiefly  engaged  in  making  cotton  goods,  and 
that  in  all  probability  they  will,  within  six  months  more,  be  increased  to 
four  times  that  number.  In  Paterson,  N.  J.,  where,  two  years  ago,  only 
three  out  of  sixteen  of  its  extensive  factories  were  in  operation  ...  all  are 
now  inVigorous  employment." — "  Niles's  Register,"  XXL,  39  (1821).  Com- 


32  PROTECTION  TO  YOUNG  INDUSTRIES. 

extension  of  the  industry.  The  beginning  of  those  man- 
ufacturing villages  which  now  form  the  characteristic 
economic  feature  of  New  England  falls  in  this  period. 
Nashua  was  founded  in  1823.  Fall  River,  which  had 
grown  into  some  importance  during  the  war  of  18 14,  grew 
rapidly  from  1820  to  1830.1  By  far  the  most  important 
and  the  best  known  of  the  new  ventures  in  cotton  manu- 
facturing was  the  foundation  of  the  town  of  Lowell,  which 
was  undertaken  by  the  same  persons  who  had  been  en- 
gaged in  the  establishment  of  the  first  power-loom  factory 
at  Waltham.  The  new  town  was  named  after  the  inventor 
of  the  power-loom.  The  scheme  of  utilizing  the  falls  of 
the  Merrimac,  at  the  point  where  Lowell  now  stands,  had 
been  suggested  as  early  as  1821,  and  in  the  following  year 
the  Merrimac  Manufacturing  Company  was  incorporated. 
In  1823  manufacturing  began,  and  was  profitable  from  the 
beginning;  and  in  1824  the  future  growth  of  Lowell  was 
clearly  foreseen.2 

pare  Ibid.,  XXII.,  225,  250(1822);  XXIII.,  35,  88(1823);  and  passim. 
In  Woodbury's  cotton  report,  cited  above,  it  is  said  (p.  57)  that  "  there  was 
a  great  increase  [in  cotton  manufacturing]  in  1806  and  1807  ;  again  during 
the  war  of  1812  ;  again  from  1820  to  1825  ;  and  in  1831-32." 

1  Fox's  "  History  of  Dunstable  "  ;  Earl's  "  History  of  Fall  River,"  p.  20 
seq. 

2  See  the  account  in  Appleton,  pp.  17-25.  One  of  the  originators  of  the 
enterprise  said  in  1824  :  "  If  our  business  succeeds,  as  we  have  reason  to 
expect,  we  shall  have  here  [at  Lowell]  as  large  a  population  in  twenty 
years  from  this  time  as  there  was  in  Boston  twenty  years  ago." — Batchel- 
der,  p.  69. 

In  Bishop,  II.,  309,  is  a  list  of  the  manufacturing  villages  of  1826,  in 
which  some  twenty  places  are  enumerated. 


THE   COTTON  MANUFACTURE.  33 

From  this  sketch  of  the  early  history  of  the  cotton 
manufacture  we  may  draw  some  conclusions.  Before 
1808  the  difficulties  in  the  way  of  the  introduction  of  this 
branch  of  industry  were  such  that  it  made  little  progress. 
These  difficulties  were  largely  artificial ;  and  though  the 
obstacles  arising  from  ignorance  of  the  new  processes  and 
from  the  absence  of  experienced  workmen,  were  partly 
removed  by  the  appearance  of  Slater,  they  were  sufficient, 
when  combined  with  the  stimulus  which  the  condition  of 
foreign  trade  gave  to  agriculture  and  the  carrying  trade, 
to  prevent  any  appreciable  development.  Had  this 
period  come  to  an  end  without  any  accompanying  politi- 
cal change — had  there  been  no  embargo,  no  non-inter- 
course act,  and  no  war  with  England — the  growth  of  the 
cotton  manufacture,  however  certain  to  have  taken  place 
in  the  end,  might  have  been  subject  to  much  friction  and 
loss.  Conjecture  as  to  what  might  have  been  is  danger- 
ous, especially  in  economic  history,  but  it  seems  reasonable 
to  suppose  that  if  the  period  before  1808  had  come  to  an ' 
end  without  a  jar,  the  eager  competition  of  well-estab- 
lished English  manufacturers,  the  lack  of  familiarity  with 
the  processes,  and  the  long-continued  habit,  especially  in 
New  England,  of  almost  exclusive  attention  to  agriculture, 
commerce,  and  the  carrying  trade,  might  have  rendered 
slow  and  difficult  the  change,  however  inevitable  it  may 
have  been,  to  greater  attention  to  manufactures.  Under 
such  circumstances  there  might  have  been  room  for  the 
legitimate  application  of  protection  to  the  cotton  manu- 


34  PROTECTION  TO  YOUNG  INDUSTRIES. 

facture  as  a  young  industry.  But  this  period,  in  fact, 
came  to  an  end  with  a  violent  shock,  which  threw  indus- 
try out  of  its  accustomed  grooves,  and  caused  the  striking 
growth  of  the  cotton  manufacture  from  1808  to  181 5. 
The  transition  caused  much  suffering,  but  it  took  place 
sharply  and  quickly.  The  interruption  of  trade  was  equiv- 
alent to  a  rude  but  vigorous  application  of  protection, 
which  did  its  work  thoroughly.  When  peace  came,  in 
18 1 5,  it  found  a  large  number  of  persons  and  a  great 
amount  of  capital  engaged  in  the  cotton  manufacture, 
and  the  new  processes  of  manufacture  introduced  on  an 
extensive  scale.  Under  such  circumstances  the  industry 
was  certain  to  be  maintained  if  it  was  for  the  economic 
interest  of  the  country  that  it  should  be  carried  on. 

The  duties  of  the  tariff  of  18 16,  therefore,  can  hardly 
be  said  to  have  been  necessary.  Nevertheless,  they  may 
have  been  of  service.  The  assistance  they  gave  was,  it  is 
true,  insignificant  in  comparison  with  the  shelter  from  all 
foreign  competition  during  the  war.  Indeed,  most  manu- 
facturers desired  much  higher  duties  than  were  granted.1 
It  is  true,  also,  that  the  minimum  duty  on  cottons  was 
least  effective  during  the  years  immediately  after  the  war, 
when  the  price  of  cottons  was  higher,  and  the  duty  was 
therefore  proportionately  less  high.     But  these  years  be- 

1  "  In  1816  a  new  tariff  was  to  be  made".  The  Rhode  Island  manufac- 
turers were  clamorous  for  a  very  high  specific  duty.  Mr.  Lowell's  views  on 
the  tariff  were  much  more  moderate,  and  he  finally  brought  Mr.  Lowndes 
and  Mr.  Calhoun  to  support  the  minimum  of  t\  cents  a  yard,  which  was 
carried." — Appleton,  p.  13. 


THE   COTTON  MANUFACTURE.  35 

tween  the  close  of  the  war  and  the  general  fall  of  prices 
in  1819  were  trying  for  the  manufacturers.  The  normal 
economic  state,  more  favorable  for  them,  was  not  reached 
till  the  crisis  of  18 18-19  was  well  over.  During  the  inter- 
vening years  the  minimum  duty  may  have  assisted  the 
manufacturers  without  causing  any  permanent  charge  on 
the  people.  The  fact  that  careful  and  self-reliant  men, 
like  the  founders  of  the  Waltham  and  Lowell  enterprises, 
were  most  urgent  in  advising  the  adoption  of  the  rates 
of  1 8 16 — at  a  time,  too,  when  the  practice  of  appealing  to 
Congress  for  assistance  when  in  distress  had  not  yet  be- 
come common  among  manufacturers — may  indicate  that 
those  rates  were  of  service  in  encouraging  the  continuance 
of  the  manufacture.  How  seriously  its  progress  would 
have  been  impeded  or  retarded  by  the  absence  of  duties, 
cannot  be  said.  On  the  whole,  although  the  great  im- 
pulse to  the  industry  was  given  during  the  war,  the  duties 
on  cottons  in  the  tariff  of  18 16  may  be  considered  a  judi- 
cious application  of  the  principle  of  protection  to  young 
industries. 

Before  1824,  the  manufacture,  as  we  have  seen,  was  se- 
curely established.  The  further  application  of  protection 
in  that  and  in  the  following  years  was  needless,  and,  so  far 
as  it  had  any  effect,  was  harmful.  The  minimum  valua- 
tion was  raised  in  1824  to  30  cents,  and  in  1828  to  35 
cents.  The  minimum  duties  were  thereby  raised  to  7J  and 
8}  cents  respectively.  By  1824  the  manufacture  had  so 
firm  a  hold  that  its  further  extension  should  have  been 


36  PROTECTION  TO   YOUNG  INDUSTRIES. 

left  to  individual  enterprise,  which  by  that  time  might 
have  been  relied  on  to  carry  the  industry  as  far  as  it  was 
for  the  economic  interest  of  the  country  that  it  should  be 
carried.  The  increased  duties  of  1824  and  1828  do  not 
come  within  the  scope  of  the  present  discussion. 


IV. 

THE   WOOLLEN   MANUFACTURE. 

THE  sudden  and  striking  growth  of  the  cotton  manu- 
facture in  the  last  hundred  years  has  caused  its  history,  in 
this  country  as  in  others,  to  be  written  with  comparative 
fulness.  Of  the  early  history  of  the  manufacture  of 
woollen  goods  in  the  United  States  we  have  but  scanty 
accounts  ;  but  these  are  sufficient  to  show  that  the  general 
course  of  events  was  similar  to  that  in  cotton  manufac- 
turing. During  the  colonial  period  and  the  years  imme- 
diately after  the  Revolution,  such  woollen  cloths  as  were 
not  spun  and  woven  in  households  for  personal  use  were 
imported  from  England.  The  goods  of  household  manu- 
facture, however,  formed,  and  for  many  years  after  the  in- 
troduction of  machinery  continued  to  form,  by  far  the 
greater  part  of  those  in  use.  The  first  attempt  at  making 
woollens  in  large  quantities  is  said  to  have  been  made  at 
Ipswich,  Mass.,  in  1792  ;  but  no  machinery  seems  to  have 
been  used  in  this  undertaking.  In  1794  the  new  machin- 
ery was  for  the  first  time  applied  to  the  manufacture  of 
wool,  and  it  is  noteworthy  that,  as  in  the  case  of  the  cot- 
ton manufacture,  the  machinery  was  introduced  by  En- 

37 


38  PROTECTION  TO  YOUNG  INDUSTRIES. 

lish  workmen.  These  were  the  brothers  Arthur  and 
John  Scholfield,  who  came  to  the  United  States  in  1793, 
and  in  the  next  year  established  a  factory  at  Byfield, 
Mass.  Their  machinery,  however,  was  exclusively  for  card- 
ing wool,  and  for  dressing  (fulling)  woollen  goods  ;  and 
for  the  latter  purpose  it  was  probably  in  no  way  different 
from  that  of  the  numerous  fulling-mills  which  were  scat- 
tered over  the  country  during  colonial  times.  Spinning 
and  weaving  were  done,  as  before,  on  the  spinning-wheel 
and  the  hand-loom.  The  Scholfields  introduced  carding- 
machinery  in  place  of  the  hand-cards,  and  seem  to  have 
carried  on  their  business  in  several  places  with  success.  A 
Scotchman,  James  Saunderson,  who  emigrated  in  1794, 
also  introduced  carding-machines  at  New  Ipswich,  N.  H., 
in  1 801.  Their  example,  however,  was  followed  by  few. 
Carding-machines  were  introduced  in  a  few  other  places 
between  1800  and  1808  ;  but  no  development  of  the  busi- 
ness of  systematically  making  cloth,  or  preparing  wool 
for  sale,  took  place.  The  application  of  machinery  for 
spinning  does  not  seem  to  have  been  made  at  all.1  One 
great  difficulty  in  the  way  of  the  woollen  manufacture  was 
the  deficient  supply  and  poor  quality  of  wool.  The 
means  of  overcoming  this  were  supplied  when  in  1802  a 
large  flock  of  fine  merino  sheep  was  imported  from  Spain, 


1  See  a  sketch  of  the  early  history  of  the  woollen  manufacture  in  Taft's 
"  Notes  on  the  Introduction  of  the  Woollen  Manufacture."  Compare  the 
same  writer's  account  in  "  Bulletin  National  Ass.  of  Wool  Manufacturers," 
II.,  478-488  and  the  scattered  notices  in  Bishop,  "  Hist,  of  Manufactures," 
I.,  421,  and  II.,  106,  109,  118,  etc. 


THE    WOOLLEN  MANUFACTURE. 


39 


followed  in  1809  anc*  18 10  by  several  thousand  pure  me- 
rinos from  the  same  country.1  But  imports  from  England 
continued  to  be  large,  and  those  woollen  cloths  that  were 
not  homespun  were  obtained  almost  exclusively  from  the 
mother  country.2 

When  the  period  of  restriction  began  in  1808,  the  wool- 
len manufacture  received,  like  all  other  industries  in  the 
same  position,  a  powerful  stimulus.  The  prices  of  broad- 
cloth, then  the  chief  cloth  worn  besides  homespun,  rose 
enormously,  as  did  those  of  flannels,  blankets,  and  other 
goods,  which  had  previously  been  obtained  almost  exclu- 
sively by  importation.  We  have  no  such  detailed  state- 
ments as  are  given  of  the  rise  of  the  cotton  manufacture. 
It  is  clear,  however,  that  the  manufacture  of  woollen 
goods,  which  had  had  no  real  existence  before,  began, 
and  was  considerably  extended.     The  spinning  of  wool  by 


1  Bishop,  II.,  94,  134. 

2  The  United  States  were  important  customers  of  woollens  for  England, 
as  appears  from  the  following  figures,  which  give  in  millions  of  pounds 
sterling  the  total  exports  of  woollens  from  England,  and  those  of  exports  to 

the  United  States. 

Total  To  the  U.  S. 

1-5 

1.6 

1.4 

1.0 

1 '4 
2.0 

2.3 
1.9 
2.4 
2.8 
Brothers,  "Wool  and  Wool  Manufactures  of  Great  Britain,"  143,  144 


1790 

5.2 

1791 

5-5 

1792 

5-5 

1793 

3-8 

1794 

4.4 

1795 

5-2 

1796 

6.0 

1797 

4-9 

1798 

6.5 

1799 

6.9 

40  PROTECTION  TO   YOUNG  INDUSTRIES. 

machinery  was  introduced,  and  goods  were  made  for  sale 
on  a  large  scale.  As  early  as  1810  the  carding  and  spin- 
ning of  wool  by  machinery  was  begun  in  some  of  the 
cotton  mills  in  Rhode  Island.1  In  Northampton,  Mass., 
Oriskany,  N.  Y.,  and  other  places,  large  establishments 
for  the  manufacture  of  woollen  goods  and  of  satinets 
(mixed  cotton  and  woollen  goods)  sprang  up.  The  value 
of  woollen  goods  made  in  factories  is  said  to  have  risen 
from  $4,000,000  in  18 10  to  $19,000,000  in  1815.2 

After  1 8 1 5  the  makers  of  woollens  naturally  encountered 
great  difficulties  in  face  of  the  renewed  and  heavy  impor- 
tations of  English  goods.  The  tariff  of  1816  gave  them 
the  same  duty  that  was  levied  on  cottons,  25  per  cent.,  to 
be  reduced  in  three  years  to  20  per  cent.  The  reduction 
of  the  duty  to  20  per  cent.,  which  was  to  have  taken  place 
in  18 19,  was  then  postponed,  and  in  the  end  never  took 
place.  No  minimum  valuation  was  fixed  for  woollen 
goods ;  hence  there  was  not,  as  for  cotton  goods,  a  mini- 
mum duty.  Wool  was  admitted  at  a  duty  of  15  percent. 
The  scheme  of  duties,  under  the  tariff  of  18 16,  thus 
afforded  no  very  vigorous  protection.  .  Nor  did  the  provi- 
sions of  the  act  of  1824  materially  improve  the  position  of 
the  woollen  manufacturers.  The  duty  on  woollen  goods 
was  in  that  act  raised  to  30  per  cent,  in  the  first  instance, 
and  to  334-  per  cent,  after   1825.     At  the  same  time  the 

1  Gallatin's  report  of  1810,  "  Am.  State  Papers,  Finance,"  II.  427  ;  Taft, 

44- 

3  "  Bulletin  Wool  Manufacturers,"  II.,  486.  This  is  hardly  more  than  a 
loose,  though  significant,  guess. 


THE   WOOLLEN  MANUFACTURE.  41 

duty  on  wool  (except  that  costing  ten  cents  a  pound  or 
less)  was  raised  to  20  per  cent,  in  the  first  place,  to  25  per 
cent,  after  1825,  and  to  30  per  cent,  after  1826.  If  foreign 
wool  had  to  be  imported  to  supplement  the  domestic 
supply, — and  such  a  necessity  has  constantly  existed  in 
this  country  since  1 8 16, — the  increased  price  of  wool  in 
this  country,  as  compared  with  other  countries  which  ad- 
mitted wool  free  or  at  a  lower  duty,  would  tend  to  make 
the  effectual  protection  to  woollen  manufacturers  far 
from  excessive. 

Notwithstanding  the  very  moderate  encouragement 
given  from  18 16  to  1828,  the  woollen  manufacture  steadily 
progressed  after  the  crisis  of  18 19,  and  in  1828  was 
securely  established.  During  the  years  from  the  close  of 
the  war  till  18 19  much  embarrassment  was  felt,  and  many 
establishments  were  given  up  ;  but  others  tided  over  this 
trying  time.1  After  18 19  the  industry  gradually  responded 
to  the  more  favorable  influences  which  then  set  in  for 
manufactures,  and  made  good  progress.  During  1821 
and  1822  large  investments  were  made  in  factories  for 
making  woollen  cloths,  especially  in  New  England.2 
In  1823  the  manufacturers  of  woollens  in  Boston 
were    sufficiently    numerous    to     form    an    independent 

1  Thus  a  large  factory  in  Northampton,  built  in  1809  (Bishop,  II.,  136), 
was  still  in  operation  in  1828  ("Am.  State  Papers,  Finance,"  V.,  815).  In 
Taf  t's  "  Notes  "  there  is  mention  (pp.  39-40)  of  the  Peacedale  Manufacturing 
Company,  which  began  in  1804,  and  has  lasted  to  the  present  time.  It  is 
said  that  the  spinning-jenny  was  first  applied  to  wool  in  this  factory, 

2  Bishop,  II,,  270,  294  ;  Niles,  XXII.,  225. 


42  PROTECTION  TO   YOUNG  INDUSTRIES. 

organization  for  the  promotion  of  their  interests,  which 
were,  in  that  case,  to  secure  higher  protective  duties.1 
The  best  evidence  which  we  have  of  the  condition  of  the 
industry  during  these  years  is  to  be  found  in  the  testi- 
mony given  in  1828  by  various  woollen  manufacturers  be- 
fore the  Committee  of  the  House  of  Representatives  on 
Manufactures.  This  testimony  shows  clearly  that  the 
industry  was  established  in  1828  on  such  a  scale  that  the 
difficulties  arising  from  lack  of  skill  and  experience,  unfa- 
miliarity  with  machinery  and  methods,  and  other  such 
temporary  obstacles,  no  longer  had  influence  in  prevent- 
ing its  growth.2  The  capital  invested  by  the  thirteen 
manufacturers  who  testified  before  this  committee  varied 
from  $20,000  to  $200,000,  the  average  being  $85,000. 
The  quantity  of  wool  used  by  each  averaged  about  62,000 
pounds  per  year.  These  figures  indicate  a  scale  of  opera- 
tion very  considerable  for  those  days.  Six  of  the  fac- 
tories referred  to  had  been  established  between  1809  anc^ 
181 5.  With  the  possible  exception  of  one,  in  regard  to 
which  the  date  of  foundation  was  not  stated,  none  had  been 
established  in  the  years  between  181 5  and  1820;  the  remain- 
ing six  had  been  built  after  1820.  Spinning-machinery  was 
in  use  in  all.  Some  used  power-looms,  others  hand-looms. 
The  application  of  the  power-loom  to  weaving  woollens,  said 
one  manufacturer,  had  been  made  in   the  United  States 


1  Niles,  XXV.,  148,  189, 

2  The  testimony  is  printed  in  full  in  "American  State  Papers,  Finance,' 

v.,  792-832. 


THE  WOOLLEN  MANUFACTURE.  43 

earlier  than  in  England.1  An  indication,  similar  to  this, 
of  the  point  reached  by  the  American  producers  in  the 
use  of  machinery,  was  afforded  by  the  difference  of  opin- 
ion in  regard  to  the  comparative  merits  of  the  jenny,  and 
of  the  "  Brewster/'  a  spinning-machine  of  recent  inven- 
tion. Goods  of  various  kinds  were  made — broadcloths, 
cassimeres,  flannels,  satinets,  and  kerseys.  The  opinion 
was  expressed  by  several  that  the  mere  cost  of  manufac- 
turing was  not  greater  in  the  United  States  than  in  Eng- 
land ;  that  the  American  manufacturer  could  produce,  at 
as  low  prices  as  the  English,  if  he  could  obtain  his  wool 
at   as  low  prices  as  his  foreign  competitor.2     This  testi- 

1  Testimony,  p.  824.  The  same  statement  is  made  by  Bishop,  II., 
317.  In  Taft's  "  Notes,"  p.  39,  there  is  an  account  of  the  application  of 
the  power-loom  to  weaving  saddle-girths  as  early  as  1S14.  In  1822  the 
power-loom  for  weaving  broadcloths  seems  to  have  been  in  common  use. — 
Taft,  p.  43- 

2  "  Broadcloths  are  now  (1828)  made  at  much  less  expense  of  labor  and 
capital  than  in  1825,  by  the  introduction  of  a  variety  of  improved  and  labor- 
saving  machinery,  amongst  which  may  be  named  the  dressing-machine  and 
the  broad  power-loom  of  American  invention  "  (p.  824).  The  power-loom 
was  very  generally  used.  "  Since  the  power-looms  have  been  put  in  opera- 
tion, the  weaving  costs  ten  cents  per  yard,  instead  of  from  eighteen  to 
twenty-eight  cents"  (p.  814).  Shepherd,  of  Northampton,  to  whose  factory 
reference  has  already  been  made  {ante  p.  44,  note  1),  said  :  "  The  differ- 
ence in  price  of  cloths  (in  the  United  States  and  in  England)  would  be  the 
difference  in  the  price  of  the  wool,  as,  in  my  opinion,  we  can  manufacture 
as  cheap  as  they  (the  English)  can"  (p.  816).  In  the  same  connection 
another  manufacturer  said  :  "  The  woollen  manufacture  is  not  yet  fairly 
established  in  this  country,  but  I  know  no  reason  why  we  cannot  manufac- 
ture as  well  and  as  cheap  as  they  can  in  England,  except  the  difference  in 
the  price  of  labor,  for  which,  in  my  opinion,  we  are  fully  compensated  by 
other  advantages.  Our  difficulties  are  not  the  cost  of  manufacturing,  but 
the  great  fluctuations  in  the  home  market,  caused  by  the  excessive  and  irreg- 


44  PROTECTION  TO   YOUNG  INDUSTRIES. 

mony  seems  to  show  conclusively  that  at  the  time  when 
it  was  given  the  woollen  manufacture  had  reached  that 
point  at  which  it  might  be  left  to  sustain  itself;  at  which 
accidental  or  artificial  obstacles  no  longer  stood  in  the 
way  of  its  growth.  That  many  of  the  manufacturers 
themselves  wanted  higher  duties,  is,  for  obvious  reasons, 
not  inconsistent  with  this  conclusion.  Progress  had  been 
less  certain  and  rapid  than  in  the  case  of  the  kindred  cot- 
ton manufacture,  for  the  conditions  of  production  were 
less  distinctly  favorable.  The  displacement  of  the  house- 
hold products  by  those  of  the  factory  was  necessarily  a 
gradual  process,  and  made  the  advance  of  the  woollen 
manufacture  normally  more  slow  than  that  of  the  kindred 
industry.  But  the  growth  of  the  cotton  manufacture,  so 
similar  to  that  of  wool,  of  itself  removed  many  of  the  ob- 
stacles arising  from  the  recent  origin  of  the  latter.  The 
use  of  machinery  became  common,  and,  when  the  first 
great  steps  had  been  taken,  was  transferred  with  com- 
parative ease  from  one  branch  of  textile  production  to 
another.  In  1828,  when  for  the  first  time  heavy  protec- 
tion was  given  by  a  complicated  system  of  minimum  du- 
ties, and  when  the  actual  rates  rose,  in  some  cases,  to 
over  100  per  cent.,  this  aid  was  no  longer  needed  to  sus- 

ular  foreign  importations.  The  high  prices  we  pay  for  labor  are,  in  my 
opinion,  beneficial  to  the  American  manufacturer,  as  for  tho>e  wages  we 
get  a  much  better  selection  of  hands,  and  those  capable  and  willing  to  per- 
form a  much  greater  amount  of  labor  in  a  given  time.  The  American  man- 
ufacturer also  uses  a  larger  share  of  labor-saving  machinery  than  the  Eng- 
lish "  (p.  829). 


THE    WOOLLEN  MANUFACTURE.  45 

tain  the  woollen  manufacture.     The  period  of  youth  had 
then  been  past. 

It  appears  that  direct  protective  legislation  had  even 
less  influence  in  promoting"  the  introduction  and  early 
growth  of  the  woollen  than  of  the  cotton  manufacture. 
The  events  of  the  period  of  restriction,  from  1808  to  181 5, 
led  to  the  first  introduction  of  the  industry,  and  gave  it 
the  first  strong  impulse.  Those  events  may  indeed  be 
considered  to  have  been  equivalent  to  effective,  though 
crude  and  wasteful,  protective  legislation,  and  it  may  be 
that  their  effect,  as  compared  with  the  absence  of  growth 
before  1808,  shows  that  protection  in  some  form  was 
needed  to  stimulate  the  early  growth  of  the  woollen 
manufacture.  But,  by  18 15,  the  work  of  establishing  the 
manufacture  had  been  done.  The  moderate  duties  of 
the  period  from  18 16  to  1828,  partly  neutralized  by  the 
duties  on  wool,  may  have  something  to  sustain  it  ;  but 
the  position  gained  in  181 5  would  hardly  have  been  lost 
in  the  absence  of  these  duties.  By  1828,  when  strong  pro- 
tection was  first  given,  a  secure  position  had  certainly 
been  reached. 


V. 

THE   IRON   MANUFACTURE. 

We  turn  now  to  the  early  history  of  the  iron  manufac- 
ture,— the  production  of  crude  iron,  pig  and  bar.  We 
shall  examine  here  the  production,  not  of  the  finished 
article,  but  of  the  raw  material.  It  is  true  that  the  pro- 
duction of  crude  iron  takes  place  under  somewhat  different 
conditions  from  those  which  affect  cotton  and  woollen 
goods.  The  production  of  pig-iron  is  more  in  the  nature 
of  an  extractive  industry,  and,  under  ordinary  circum- 
stances, is  subject  in  some  degree  to  the  law  of  diminishing 
returns.  To  commodities  produced  under  the  conditions 
of  that  law,  the  argument  for  protection  to  young  indus- 
tries has  rtot  been  supposed,  at  least  by  its  more  moderate 
advocates,  to  apply,  since  the  sites  where  production  will 
be  carried  on  to  best  advantage  are  apt  to  be  determined 
by  unalterable  physical  causes.1  It  happens,  however, 
that  changes  in  the  processes  of  production,  analogous  to 
those  which  took  place  in  the  textile  industries,  were 
made  at  about  the  same  time  in  the  manufacture  of  crude 

1  See,  for  instance,  List,  "System  of  National  Economy,"  Phila.,  1856, 
pp.  296-300. 

46 


THE  IRON  MANUFACTURE.  47 

iron.  These  changes  rendered  more  possible  the  success- 
ful application  of  the  principle  of  protection  to  young 
industries,  and  make  the  discussion  of  its  application 
more  pertinent.  There  is  another  reason  why  we  should 
consider,  in  this  connection,  the  raw  material  rather  than 
the  finished  article.  The  production  of  the  latter,  of  the 
tools  and  implements  made  of  iron,  has  not,  in  general, 
needed  protection  in  this  country,  nor  has  protection  often 
been  asked  for  it.  The  various  industries  by  which  crude 
iron  is  worked  into  tools  and  consumable  articles  were 
firmly  established  already  in  the  colonial  period,  and  since 
then  have  maintained  themselves  with  little  difficulty. 
The  controversy  on  the  protection  of  the  iron  manufac- 
ture has  been  confined  mainly  to  the  production  of  pig- 
and  bar-iron.  It  is  to  this,  therefore,  that  we  shall  direct 
our  attention.  The  production  of  pig-  and  bar-iron  will 
be  meant  when,  in  the  following  pages,  the  "  iron  manu- 
facture "  is  spoken  of. 

During  the  eighteenth  century  England  was  a  country 
importing,  and  not,  as  she  is  now,  one  exporting,  crude 
iron.  The  production  of  pig-  and  bar-iron  was  accordingly 
encouraged  in  her  colonies,  and  production  was  carried  on 
in  them  to  an  extent  considerable  for  those  days.  Large 
quantities  of  bar-iron  were  exported  from  the  American 
colonies    to     England.1     The  manufacture   of    iron   was 

1  See  the  tables  in  Bishop,  I.,  629,  and  Scrivenor,  ''  History  of  the  Iron 
Trade,"  p.  81.  In  1740  the  total  quantity  of  iron  produced  in  England 
was  about  17,000  tons  ;  at  that  time  from  2,000  to  3,000  tons  annually  were 
regularly  imported  from  the  American  colonies. 


48  PROTECTION  TO   YOUNG  INDUSTRIES. 

firmly  established  in  the  "colonies  according  to  the  meth- 
ods common  at  the  time.  During  the  second  half  of  the 
eighteenth  century,  however,  the  great  change  took  place 
in  England  in  the  production  of  iron  which  has  placed 
that  country  in  its  present  position  among  iron-making 
countries,  and  has  exercised  so  important  an  influence  on 
the  material  progress  of  our  time.  Up  to  that  time  char- 
coal had  been  used  exclusively  for  smelting  iron,  and  the 
iron  manufacture  had  tended  to  fix  itself  in  countries 
where  wood  was  abundant,  like  Norway,  Sweden,  Russia, 
and  the  American  colonies.  About  1750  the  use  of  coke 
in  the  blast  furnace  began.  The  means  were  thus  given 
for  producing  iron  in  practically  unlimited  quantities, 
without  dependence  for  fuel  on  forests  easily  exhaustible  ; 
and  in  the  latter  part  of  the  century,  when  the  steam- 
engine  supplied  the  motive  power  for  the  necessary  strong 
blast,  production  by  means  of  coke  increased  with  great 
rapidity.1  At  the  same  time,  in  1783  and  1784,  came  the 
inventions  of  Cort  for  puddling  and  rolling  iron.  By  these 
the  transformation  of  pig-iron  into  bar-iron  of  convenient 
sizes  was  effected  in  large  quantities.  Before  the  inven- 
tions of  Cort,  pig-iron  had  been  first  converted  into  bar 
under  the  hammer,  and  the  bar,  at  a  second  distinct  oper- 
ation in  a  slitting  mill,  converted  into  bars  and  rods  of  con- 
venient size.  The  rolled  bar  made  by  the  processes  of 
puddling  and  rolling — which  are  still  in  common  use — is 

1  See  the  good  account  of  the  importance  of  the  use  of  coke  (coal)  in  Je- 
vons,  "  The  Coal  Question,"  ch.  XV.,  pp.  309-316. 


THE  IRON  MANUFACTURE. 


49 


inferior  in  quality,  at  least  after  the  first  rolling,  to  the 
hammered  and  slit  iron,  known  as  hammered  bar,  pro- 
duced by  the  old  method.  Cort's  processes,  however, 
made  the  iron  much  more  easily  and  cheaply,  and  the 
lower  price  of  the  rolled  iron  more  than  compensated,  for 
most  purposes,  for  its  inferior  quality.  At  the  same  time 
these  processes  made  easy  and  fostered  the  change  from 
production  on  a  small  sale  to  production  on  a  large  scale. 
This  tended  to  bring  about  still  greater  cheapness,  and 
made  the  revolution  in  the  production  of  iron  as  great  as 
that  in  the  textile  industries,  and  similar  to  it  in  many  im- 
portant respects. 

During  the  period  1789- 1808  these  changes  in  the  iron 
manufacture  were  too  recent  to  have  had  any  appreciable 
effect  on  the  conditions  of  production  and  supply  in  the 
United  States.  The  manufacture  of  iron,  and  its  trans- 
formation into  implements  of  various  kinds,  went  on 
without  change  from  the  methods  of  the  colonial  period. 
Pig-iron  continued  to  be  made  and  converted  into  ham- 
mered bar  in  small  and  scattered  works  and  forges.1  No 
pig-iron  seems  to  have  been  imported.  Bar-iron  was  im- 
ported, in  quantities  not  inconsiderable,  from  Russia2 ; 
but  no  crude  iron  was  imported  from  England.  The  im- 
portations of  certain  iron  articles,  not  much  advanced  be- 
yond the  crude  state,  such  as  nails,  spikes,  anchors,  cables, 
showed    a    perceptible    increase     during     this     period.3 

1  French,  "  Hist,  of  Iron  Manufacture,"  p.  16.  2  Ibid.,  p.  13. 

3  The  imports  of  iron,  so  far  as  separately  stated  in  the  Treasury  reports, 
may  be  found  in  Young's  Report  on  Tariff  Legislation,  pp.  XXVI.- 
XXXVI.     Cp.  Grosvenor,  "  Docs  Protection  Protect  ?  "  pp.  174,  175- 


50  PROTECTION  TO   YOUNG  INDUSTRIES. 

Whether  this  increase  was  the  result  of  the  general  con- 
ditions which  tended  to  swell  imports  during  this  period, 
or  was  the  first  effect  of  the  new  position  which  England 
was  taking  as  an  iron-making  country,  cannot  be  deter- 
mined. Information  on  the  state  of  the  industry  during 
this  period  is  meagre  ;  but  it  seems  to  have  been  little 
affected  by  the  protective  duties  which  Congress  enacted 
on  nails,  steel,  and  some  other  articles.  No  protection 
was  attempted  to  be  given  to  the  production  of  pig  or 
bar-iron,  for  it  was  thought  that  the  domestic  producers 
would  be  able  to  compete  successfully  with  their  foreign 
competitors  in  this  branch  of  the  iron-trade. 

During  the  period  of  restriction  from  1808  to  1815,  the 
iron  and  manufactures  of  iron  previously  imported,  had 
to  be  obtained,  as  far  as  possible,  at  home.  A  large  in- 
crease in  the  quantity  of  iron  made  in  the  country  accord- 
ingly took  place.  The  course  of  events  was  so  similar  to 
that  already  described  in  regard  to  textile  manufactures 
that  it  need  not  be  referred  to  at  length.  When  peace 
came,  there  were  unusually  heavy  importations  of  iron, 
prices  fell  rapidly,  and  the  producers  had  to  go  through 
a  period  of  severe  depression. 

In  1 8 16  Congress  was  asked  to  extend  protection  to 
the  manufacture  of  iron,  as  well  as  to  other  industries. 
The  tariff  of  18 16  imposed  a  duty  of  45  cents  a  hundred- 
weight on  hammered-bar  iron,  and  one  of  $1.50  a  hun- 
dred-weight on  rolled  bar,  with  corresponding  duties  on 
sheet,  hoop,  and  rod  iron.     Pig-iron  was  admitted  under 


THE  IRON  MANUFACTURE.  5 1 

an  ad  valorem  duty  of  20  per  cent.  At  the  prices  of  bar- 
iron  in  1 8 16,  the  specific  duty  on  hammered  bar  was 
equivalent  to  about  20  per  cent.,1  and  was,  therefore,  but 
little  higher  than  the  rates  of  15  and  17^-  per  cent,  levied 
in  1804  and  1807.  The  duty  on  rolled  bar  was  much 
higher,  relatively  to  price,  as  well  as  absolutely,  than  that 
on  hammered  bar,  and  was  the  only  one  of  the  iron  duties 
of  1 8 16  which  gave  distinct  and  vigorous  protection. 
These  duties  were  not  found  .sufficient  to  prevent  the 
manufacturers  from  suffering  heavy  losses,  and  more  effec- 
tive protection  was  demanded.  In  18 18,  Congress,  by  a 
special  act,  raised  the  duties  on  iron  considerably,  at  the 
same  time,  as  was  noted  above,2  that  it  postponed  the 
reduction  from  25  to  20  per  cent,  on  the  duty  on  cottons 
and  woollens.  Both  of  these  measures  were  concessions 
to  protective  feeling,  and  they  may  have  been  the  result 
of  an  uneasy  consciousness  of  the  disturbed  state  of  the 
country  and  of  the  demand  for  protection  which  was  to 
follow  the  financial  crisis  of  the  next  year.3  The  act  of 
1818  fixed  the  duty  on  pig-iron  at  50  cents  per  hundred- 
weight— the  first  specific  duty  imposed  on  pig-iron  ;  ham- 
mered bar  was  charged  with  75  cents  a  hundred-weight, 
instead  of  45  cents,  as  in  1816;  and  higher  duties  were 
put  on  castings,  anchors,  nails,  and  spikes.4     These  duties 

1  See  the  tables  of  prices  in  French,  pp.  35,  36. 

2  Ante,  p.  27. 

3  There  is  nothing  in  the  Congressional  debates  on  the  acts  of  1 818  to  show 
what  motives  caused  them  to  be  passed. 

4  "  Statutes  at  Large,"  III.,  460. 


52  PROTECTION  TO   YOUNG  INDUSTRIES. 

were  comparatively  heavy  ;  and  with  a  steady  fall  in  the 
price  of  iron,  especially  after  the  crisis  of  1 818-19,  they 
became  proportionately  heavier  and  heavier.  Neverthe- 
less, in  the  tariff  of  1824  they  were  further  increased. 
The  rate  on  hammered  bar  went  up  to  90  cents  a  hundred- 
weight ;  that  on  rolled  bar  still  remained  at  $1.50,  as  it 
had  been  fixed  in  18 16.  In  1828  a  still  further  increase 
was  made  in  the  specific  duties  on  all  kinds  of  iron,  al- 
though the  continual  fall  in  prices  was  of  itself  steadily 
increasing  the  weight  of  the  specific  duties.  The  duty  on 
pig-iron  went  up  to  62J  cents  a  hundred-weight ;  that  on 
hammered  bar  to  a  cent  a  pound  (that  is,  $1.12  a  hundred- 
weight) ;  that  on  rolled  bar  to  $37  a  ton.  In  1832  duties 
were  reduced  in  the  main  to  the  level  of  those  of  1824,  and 
in  1833  the  Compromise  Act,  after  maintaining  the  duties 
of  1832  for  two  years,  gradually  reduced  them  still  further, 
till  in  1 842  they  reached  a  uniform  level  of  20  per  cent.  On 
the  whole,  it  is  clear  that  after  18 18  a  system  of  increasingly 
heavy  protection  was  applied  to  the  iron  manufacture, 
and  that  for  twenty  years  this  protection  was  maintained 
without  a  break.  From  18 18  till  1837  or  1838,  when  the 
reduction  of  duty  under  the  Compromise  Act  began  to 
take  effect  to  an  appreciable  extent,  the  duties  on  iron  in 
its  various  forms  ranged  from  40  to  100  per  cent,  on  the 
value. 

It  is  worth  while  to  dwell  for  a  moment  on  the  heavy 
duty  on  rolled  iron — much  higher  than  that  on  hammered 
iron — which  was  adopted  in  18 16,  and  maintained  through- 


THE  IRON  MANUFACTURE.  53 

out  this  period.  Congress  attempted  to  ward  off  the 
competition  of  the  cheaper  rolled  iron  by  this  heavy  dis- 
criminating duty,  which  in  1828  was  equivalent  to  one 
hundred  per  cent,  on  the  value.  When  first  established 
in  1816,  the  discrimination  was  defended  on  the  ground 
that  the  rolled  iron  was  of  inferior  quality,  and  that  the 
importation  of  the  unserviceable  article  should  be  impeded 
for  the  benefit  of  the  consumer.  The  scope  of  the  change 
in  the  iron  manufacture,  of  which  the  appearance  of  rolled 
iron  was  one  sign,  was  hardly  understood  in  18 16  and 
1 818,  and  this  argument  against  its  use  may  have  repre- 
sented truthfully  the  animus  of  the  discriminating  duty. 
But  in  later  years  the  wish  to  protect  the  consumer  from 
impositions  hardly  continued  to  be  the  motive  for  retain- 
ing the  duty.  Rolled  bar-iron  soon  became  aAvell-known 
article,  of  considerable  importance  in  commerce.  The 
discriminating  duty  was  retained  throughout,  and  in  1828 
even  increased  ;  it  was  still  levied  in  the  tariff  of  1832  ;  it 
reappeared  when  the  Whigs  carried  the  tariff  of  1842  ; 
and  it  did  not  finally  disappear  till  1846.  The  real  mo- 
tive for  maintaining  the  heavy  tax  through  these  years 
undoubtedly  was  the  unwillingness  of  the  domestic  pro- 
ducers to  face  the  competition  of  the  cheaper  article. 
The  tax  is  a  clear  illustration  of  that  tendency  to  fetter 
and  impede  the  progress  of  improvement  which  is  inhe- 
rent in  protective  legislation.  It  laid  a  considerable 
burden  on  the  community,  and,  as  we  shall  see,  it  was  of 
no  service  in  encouraging  the  early  growth  of  the  iron 


54  PROTECTION  TO   YOUNG  INDUSTRIES. 

industry.  It  is  curious  to  note  that  the  same  contest 
against  improved  processes  was  carried  on  in  France,  by 
a  discriminating  duty  on  English  rolled  iron,  levied  first 
in  1816,  and  not  taken  off  till  i860.1 

After  1 81 5  the  iron-makers  of  the  United  States  met 
with  strong  foreign  competition  from  two  directions.  In 
the  first  place,  English  pig  and  rolled  iron  was  being  pro- 
duced with  steadily  decreasing  cost.  The  use  of  coke  be- 
came universal  in  England,  and  improvements  in  methods 
of  production  were  constantly  made.  Charcoal  continued 
to  be  used  exclusively  in  the  furnaces  of  this  country  ;  for 
the  possibility  of  using  anthracite  had  not  yet  been  dis- 
covered, and  the  bituminous  coal  fields  lay  too  far  from 
what  was  then  the  region  of  dense  population  to  be  avail- 
able. While  coke-iron  was  thus  driving  out  charcoal-iron 
for  all  purposes  for  which  the  former  could  be  used,  the 
production  of  charcoal-iron  itself  encountered  the  com- 
petition of  Sweden  and  Russia.  As  the  United  States 
advanced  in  population,  the  more  accessible  forests  became 
exhausted,  and  the  greater  quantity  of  charcoal-iron  need- 
ed with  the  increase  of  population  and  of  production, 
could  be  obtained  at  home  only  at  higher  cost.  The 
Scandinavian  countries  and  Russia,  with  large  forests  and 
a  population  content  with  low  returns  for  labor,  in  large 
part  supplied  the  increased  quantity  at  lower  rates  than 
the  iron-makers  of  this  country.  Hence  the  imports -of 
iron  show  a  steady  increase,  both  those  of  pig-iron  and 
1  Ame,  "  Etudes  sur  les  Tarifs  de  Douanes,"  I.,  145. 


THE  IRON  MANUFACTURE.  55 

and  those  of  rolled  and  hammered  bar;  the  rolled  bar 
coming  from  England,  and  the  hammered  bar  from 
Sweden  and  Russia.  The  demand  for  iron  was  increasing 
at  a  rapid  rate,  and  there  was  room  for  an  increase  both 
of  the  domestic  production  and  of  imports;  but  the  rise 
in  imports  was  marked.  Notwithstanding  the  heavy 
duties,  the  proportion  of  imported  to  domestic  iron  from 
1 8 1 8  to  1840  remained  about  the  same.1 

Since  importations  continued  regularly  and  on  a  con- 
siderable scale,  the  price  of  the  iron  made  at  home  was 
clearly  raised,  at  the  seaboard,  over  the  price  of  the  for- 
eign iron  by  the  amount  of  the  duty.  The  country,  there- 
fore, paid  the  iron  tax  probably  on  the  greater  part 
used,  whether  of  foreign  or  domestic  origin,  in  the  shape 
of  prices  from  forty  to  one  hundred  per  cent,  higher  than 
those  at  which  the  iron  could  have  been  bought  abroad. 

1  On  the  production  and  imports  of  iron  in  the  years  after  1830  the  reader 
is  referred  to  the  remarks  0:1  p.  124,  and  to  the  "  Quarterly  Journal  of  Eco- 
nomics, "  vol.  II. ,  p.  377.  Until  the  middle  of  the  decade  1820-30  the  annual 
product  of  pig-iron  is  supposed  to  have  been  about  50,000  tons,  while  in  the 
second  half  of  the  decade  it  is  put  at  100,000  tons  and  more.  The  imports 
of  crude  iron  averaged  about  20,000  tons  per  year  in  1818-21,  about  30,000 
tons  in  1822-27,  and  rose  to  an  average  of  about  40,000  Ions  in  1828-30. 
These  figures  as  to  imports  refer  mainly  to  bar-iron  ;  and  as  it  required  in 
those  days  about  if  tons  of  pig  to  make  a  ton  of  bar  (French,,  p.  54),  some 
additions  must  be  made  to  the  imports  of  bar  before  a  proper  comparison 
can  be  made  between  the  domestic  and  the  imported  supply.  An  addition 
must  also  be  made  for  the  considerable  imports  of  steel,  sheet-iron,  anvils, 
anchors,  and  other  forms  of  manufactured  iron.  Figures  of  imports  are 
given  in  Grosvenor,  pp.  198,  199  ;  of  domestic  production,  by  R.  W.  Ray- 
mond, in  A.  S.  Hewitt's  pamphlet  on  "A  Century  of  Mining  and  Metallur- 
gy," page  31. 


$6  PROTECTION  TO   YOUNG  INDUSTRIES. 

The  fact  that  the  manufacture,  notwithstanding  the 
heavy  and  long-continued  protection  which  it  enjoyed, 
was  unable  to 'supply  the  country  with  the  iron  which  it 
needed,  is  of  itself  sufficient  evidence  that  its  protection 
as  a  young  industry  was  not  successful.  It  is  an  essential 
condition  for  the  usefulness  of  assistance  given  to  a  young 
industry,  that  the  industry  shall  ultimately  supply  its 
products  at  least  as  cheaply  as  they  can  be  obtained  by 
importation ;  and  this  the  iron  manufacture  failed  to  do. 
There  is,  however,  more  direct  evidence  than  this,  that 
the  manufacture  was  slow  to  make  improvements  in 
production,  which  might  have  enabled  it  eventually  to 
furnish  the  whole  supply  needed  by  the  country,  and  in 
this  way  might  have  justified  the  heavy  taxes  laid  for  its 
benefit.  Pig-iron  continued  to  be  made  only  with  char- 
coal. The  process  of  puddling  did  not  begin  to  be  intro- 
duced before  1830,  and  then  inefficiently  and  on  a  small 
scale.1  Not  until  the  decade  between  1830  and  1840,  at  a 
time  when  the  Compromise  Act  of  1833  was  steadily  de- 
creasing duties,  was  puddling  generally  introduced.2  The 
iron  rails  needed  for  the  railroads  built  at  this  time — the 
first  parts  of  the  present  railroad  system — were  supplied 
exclusively  by  importation.  In  1832  an  act  of  Congress 
had  provided  that  duties  should  be  refunded  on  all  im- 
ported rails  laid  down  within  three  years  from  the  date 

1  See  an  excellent  article,  by  an  advocate  of  protection,  in  the  American 
Quarterly  Review,  Vol.  IX.  (1831),  pp.  376,  379,  which  gives  very  full  in- 
formation in  regard  to  the  state  of  the  iron  manufacture  at  that  date. 

2  French,  p.  56. 


THE  IRON  MANUFACTURE.  57 

of  importation.  Under  this  act  all  the  first  railroads 
imported  their  rails  without  payment  of  duty.  Finally, 
the  great  change  which  put  the  iron  manufacture  on  a  firm 
and  durable  basis  did  not  come  till  the  end  of  the  decade 
1830-40,  when  all  industry  was  much  depressed,  and  duties 
had  nearly  reached  their  lowest  point.  That  change  con- 
sisted in  the  use  of  anthracite  coal  in  the  blast-furnace. 
A  patent  for  smelting  iron  with  anthracite  was  taken  out 
in  1833;  the  process  was  first  used  successfully  in  1836. 
In  1838  and  1839  anthracite  began  to  be  widely  used. 
The  importance  of  the  discovery  was  promptly  recog- 
nized ;  it  was  largely  adopted  in  the  next  decade,  and  led, 
among  other  causes,  to  the  rapid  increase  of  the  produc- 
tion of  iron,  which  has  been  so  often  ascribed  exclusively 
to  the  protection  of  the  tariff  of  1842.  With  this  change 
the  growth  of  the  iron  manufacture  on  a  great  scale  prop- 
erly begins.1 

It  seems  clear  that  no  connection  can  be  traced  between 
the  introduction  and  early  progress  of  the  iron  manufac- 
ture, and  protective  legislation.  During  the  colonial  pe- 
riod, as  we  have  seen,  under  the  old  system  of  production 
of  iron,  the  country  had  exported  and  not  imported  iron. 
The  production  of  charcoal-iron  and  of  hammered  bar 
was  carried  on  before  the  adoption  of  the  Constitution. 
During  the  first  twenty  years  after  1789,  the  iron-makers 

1  Swank's  Report  on  "  Iron  and  Steel  Production,"  in  the  Census  of 
1880,  p.  114.  A  fuller  discussion  of  the  introduction  of  the  use  of  anthra- 
cite, and  of  the  effect  of  protective  duties  after  this  had  been  done,  will  be 
found  at  pages  122-134. 


58  PROTECTION  TO   YOUNG  INDUSTRIES. 

still  held  their  own,  although  the  progress  of  invention 
elsewhere,  and  the  general  tendency  in  favor  of  heavy  im- 
ports, caused  a  growing  importation  from  abroad.  The 
production  of  iron  by  the  old  methods  and  with  the  use 
of  charcoal  was  therefore  in  no  sense  a  new  industry.  If 
the  business  of  making  charcoal-iron  could  not  be  carried 
on  or  increased  during  this  and  the  subsequent  period, 
the  cause  must  have  lain  in  natural  obstacles  and  disad- 
vantages which  no  protection  could  remove.  After  1815, 
the  new  regime  in  the  iron  trade  had  begun  ;  the  use  of 
coke  in  the  blast-furnace,  and  the  production  of  wrought- 
iron  by  puddling  and  rolling,  had  changed  completely  the 
conditions  of  production.  The  protective  legislation 
which  began  in  18 18,  and  continued  in  force  for  nearly 
twenty  years,  was  intended,  it  is  true,  to  ward  off  rather 
than  to  encourage  the  adoption  of  the  new  methods  ;  but 
it  is  conceivable  that,  contrary  to  the  intentions  of  its  au- 
thors, it  might  have  had  the  latter  effect.  No  such  effect, 
however,  is  to  be  seen.  During  the  first  ten  or  fifteen 
years  after  the  application  of  protection,  no  changes  of 
any  kind  took  place.  Late  in  the  protective  period,  and 
at  a  time  when  duties  were  becoming  smaller,  the  pud- 
dling process  was  introduced.  The  great  change  which 
marks  the  turning-point  in  the  history  of  the  iron  manu- 
facture in  the  United  States — the  use  of  anthracite — be- 
gan when  protection  ceased.  It  is  probably  not  true,  as 
is  asserted  by  advocates  of  free  trade,1  that  protection  had 

1 E.  g.y  Grosvenor,  p.  197. 


THE  IRON  MANUFACTURE. 


59 


any  appreciable  influence  in  retarding  the  use  of  coal  in 
making  iron.  Other  causes,  mainly  the  refractory  nature 
of  the  fuel,  sufficiently  account  for  the  failure  to  use  an- 
thracite at  an  earlier  date.  The  successful  attempts  to 
use  anthracite  were  made  almost  simultaneously  in  Eng- 
land and  in  the  United  States.1  The  failure  to  use  coke 
from  bituminous  coal,  which  had  been  employed  in  Eng- 
land for  over  half-a-century,  was  the  result  of  the  distance 
of  the  bituminous  coal-fields  from  the  centre  of  popula- 
tion, and  of  the  absence  of  the  facility  of  transportation 
which  has  since  been  given  by  railroads.  It  is  hardly  prob- 
able, therefore,  that  protection  exercised  any  considerable 
harmful  influence  in  retarding  the  progress  of  improve- 
ment. But  it  is  clear,  on  the  other  hand,  that  no  advan- 
tages were  obtained  from  protection  in  stimulating  prog- 
ress. No  change  was  made  during  the  period  of  protec- 
tion which  enabled  the  country  to  obtain  the  metal  more 
cheaply  than  by  importation,  or  even  as  cheaply.  The 
duties  simply  taxed  the  community ;  they  did  not  serve 
to  stimulate  the  industry,  though  they  probably  did  not 
appreciably  retard  its  growth.  We  may  therefore  conclude 
that  the  duties  on  iron  during  the  generation  after  1815 
formed  a  heavy  tax  on  consumers  ;  that  they  impeded,  so 
far  as  they  went,  the  industrial  development  of  the  coun- 
try ;  and  that  no  compensatory  benefits  were  obtained  to 
offset  these  disadvantages. 

1  Swank,  pp.  114,  115. 


VI. 


CONCLUDING   REMARKS. 


The  three  most  important  branches  of  industry  to 
which  protection  has  been  applied,  have  now  been  ex- 
amined. It  has  appeared  that  the  introduction  of  the 
cotton  manufacture  took  place  before  the  era  of  protec- 
tion, and  that — looking  aside  from  the  anomalous  condi- 
tions of  the  period  of  restriction  from  1808  to  18 15 — its 
early  progress,  though  perhaps  somewhat  promoted  by 
the  minimum  duty  of  1816,  would  hardly  have  been 
much  retarded  in  the  absence  of  protective  duties.  The 
manufacture  of  woollens  received  little  direct  assistance 
before  it  reached  that  stage  at  which  it  could  maintain 
itself  without  help,  if  it  were  for  the  advantage  of  the 
country  that  it  should  be  maintained.  In  the  iron  man- 
ufacture twenty  years  of  heavy  protection  did  not  ma- 
terially alter  the  proportion  of  home  and  foreign  supply, 
and  brought  about  no  change  in  methods  of  production. 
It  is  not  possible,  and  hardly  necessary,  to  carry  the 
inquiry  much  further.  Detailed  accounts  cannot  be  ob- 
tained of  other  industries  to  which  protection  was  ap- 
plied ;  but   so  far  as   can    be  seen,   the  same   course    of 

60 


CONCLUDING  REMARKS.  6 1 

events  took  place  in  them  as  in  the  three  whose  history 
we  have  followed.  The  same  general  conditions  affected 
the  manufactures  of  glass,  earthenware,  paper,  cotton- 
bagging,  sail-duck,  cordage,  and  other  articles  to  which 
protection  was  applied  during  this  time  with  more  or  less 
vigor.  We  may  assume  that  the  same  general  effect,  or 
absence  of  effect,  followed  in  these  as  in  the  other  cases. 
It  is  not  intended  to  speak  of  the  production  of  agricul- 
tural commodities  like  sugar,  wool,  hemp,  and  flax,  to 
which  also  protection  was  applied.  In  the  production  of 
these  the  natural  advantages  of  one  country  over  another 
tell  more  decidedly  and  surely  than  in  the  case  of  most 
manufactures,  and  it  has  not  often  been  supposed  that 
they  come  within  the  scope  of  the  argument  we  are  con- 
sidering. 

Although,  therefore,  the  conditions  existed  under 
which  it  is  most  likely  that  protection  to  young  indus- 
tries may  be  advantageously  applied — a  young  and  unde- 
veloped country  in  a  stage  of  transition  from  a  purely 
agricultural  to  a  more  diversified  industrial  condition ;  this 
transition,  moreover,  coinciding  in  time  with  great 
changes  in  the  arts,  which  made  the  establishment  of  new 
industries  peculiarly  difficult — notwithstanding  the  pres- 
ence of  these  conditions,  little,  if  any  thing,  was  gained  by 
the  protection  which  the  United  States  maintained  in  the 
first  part  of  this  century.  Two  causes  account  for  this. 
On  the  one  hand,  the  character  of  the  people  rendered 
the  transition  of  productive  forces  to  manufactures  com- 


62  PROTECTION  TO   YOUNG  INDUSTRIES. 

paratively  easy;  on  the  other  hand,  the  shock  to  eco- 
nomic habits  during  the  restrictive  period  from  1808  to 
18 1 5  effectually  prepared  the  way  for  such  a  transition. 
The  genius  of  the  people  for  mechanical  arts  showed  it- 
self early.  Naturally  it  appeared  with  most  striking  re- 
sults in  those  fields  in  which  the  circumstances  of  the 
country  gave  the  richest  opportunities ;  as  in  the  applica- 
tion of  steam-power  to  navigation,  in  the  invention  and 
improvement  of  tools,  and  especially  of  agricultural  im- 
plements, and  in  the  cotton  manufacture.  The  ingenuity 
and  inventiveness  of  American  mechanics  have  become 
traditional,  and  the  names  of  Whitney  and  Fulton  need 
only  be  mentioned  to  show  that  these  qualities  were  not 
lacking  at  the  time  we  are  considering.  The  presence  of 
such  men  rendered  it  more  easy  to  remove  the  obstacles 
arising  from  want  of  skill  and  experience  in  manufactures. 
The  political  institutions,  the  high  average  of  intelligence, 
the  habitual  freedom  of  movement  from  place  to  place 
and  from  occupation  to  occupation,  also  made  the  rise  of 
the  existing  system  of  manufacturing  production  at  once 
more  easy  and  less  dangerous  than  the  same  change  in 
other  countries.  At  the  same  time  it  so  happened  that 
the  embargo,  the  non-intercourse  acts,  and  the  war  of 
1812  rudely  shook  the  country  out  of  the  grooves  in 
which  it  was  running,  and  brought  about  a  state  of  confu- 
sion from  which  the  new  industrial  system  could  emerge 
more  easily  than  from  a  well-settled  organization  of  indus- 
try.    The  restrictive  period  may  indeed  be  considered  to 


CONCLUDING  REMARKS.  63 

have  been  one  of  extreme  protection.  The  stimulus 
which  it  gave  to  some  manufactures  perhaps  shows  that 
the  first  steps  in  these  were  not  taken  without  some  artifi- 
cial help.  The  intrinsic  soundness  of  the  argument  for 
protection  to  young  industries  therefore  may  not  be 
touched  by  the  conclusions  drawn  from  the  history  of  its 
trial  in  the  United  States,  which  shows  only  that  the  in- 
tentional protection  of  the  tariffs  of  18 16,  1824,  and  1828 
had  little  effect.  The  period  from  1808  till  the  financial 
crisis  of  1818-19  was  a  disturbed  and  chaotic  one,  from 
which  the  country  settled  down,  with  little  assistance  from 
protective  legislation,  into  a  new  arrangement  of  its  pro- 
ductive forces. 

The  system  of  protective  legislation  began  in  18 16,  and 
was  maintained  till  toward  the  end  of  the  decade  1830-40. 
The  Compromise  Act  of  1833  gradually  undermined  it. 
By  1842  duties  reached  a  lower  point  than  that  from  which 
they  had  started  in  18 16.  During  this  whole  period  the 
argument  for  protection  to  young  industries  had  been  es- 
sentially the  mainstay  of  the  advocates  of  protection,  and 
the  eventual  cheapness  of  the  goods  was  the  chief  advan- 
tage which  they  proposed  to  obtain.  It  goes  without 
saying  that  this  was  not  the  only  argument  used,  and  that 
it  was  often  expressed  loosely  in  connection  with  other 
arguments.  One  does  not  find  in  the  popular  discussions 
of  fifty  years  ago,  more  than  in  those  of  the  present, 
precision  of  thought  or  expression.  The  "home  market" 
argument,  which,  though  essentially  distinct  from  that  for 


64  PROTECTION  TO   YOUNG  INDUSTRIES. 

young  industries,  naturally  suggests  itself  in  connection 
with  the  latter,  was  much  urged  during  the  period  we  are 
considering.  The  events  of  the  War  of  1812  had  vividly 
impressed  on  the  minds  of  the  people  the  possible  incon- 
venience, in  case  of  war,  of  depending  on  foreign  trade 
for  the  supply  of  articles  of  common  use ;  this  point  also 
was  much  urged  by  the  protectionists.  Similarly  the 
want  of  reciprocity,  and  the  possibility  of  securing,  by  re- 
taliation, a  relaxation  of  the  restrictive  legislation  of  for- 
eign countries,  were  often  mentioned.  But  any  one  who 
is  familiar  with  the  protective  literature  of  that  day, — as 
illustrated,  for  instance,  in  the  columns  of  u  Niles's  Regis- 
ter,"— cannot  fail  to  note  the  prominent  place  held  by  the 
young-industries  argument.  The  form  in  which  it  most 
commonly  appears  is  in  the  assertion  that  protection  norm- 
ally causes  the  prices  of  the  protected  articles  to  fall, J  an 
assertion  which  was  supposed,  then  as  now,  to  be  suffi- 
ciently supported  by  the  general  tendency  toward  a  fall  in 
the  price  of  manufactured  articles,  consequent  on  the  great 
improvement  in  the  methods  of  producing  such  articles. 

Shortly  after  1832,  the  movement  in  favor  of  protec- 
tion, which  had  had  full  sway  in  the  Northern  States  since 
1820,    began  *  to    lose    strength.     The    young-industries 

1  See,  for  instance,  the  temperate  report  of  J.  Q.  Adams,  in  1832,  in 
which  this  is  discussed  as  the  chief  argument  of  the  protectionists.  Adams, 
though  himself  a  protectionist,  refutes  it,  and  bases  his  faith  in  protection 
chiefly  on  the  loss  and  inconvenience  suffered  through  the  interruption  of 
foreign  trade  in  time  of  war.  The  report  is  in  "  Reports  of  Committees, 
22d  Congress,  1st  Session,  vol.  V.,  No.  481. 


CONCLUDING  REMARKS.  65 

argument  at  the  same  time  began  to  be  less  steadily 
pressed.  About  1840  the  protective  controversy  took  a 
new  turn.  It  seems  to  have  been  felt  by  this  time  that 
manufactures  had  ceased  to  be  young  industries,  and  that 
the  argument  for  their  protection  as  such,  was  no  longer 
conclusive.  Another  position  was  taken.  The  argument 
was  advanced  that  American  labor  should  be  protected 
from  the  competition  of  less  highly  paid  foreign  labor. 
The  labor  argument  had  hardly  been  heard  in  the  period 
which  has  been  treated  in  the  preceding  pages.  Indeed, 
the  difference  between  the  rate  of  wages  in  the  United 
States  and  in  Europe,  had  furnished,  during  the  early 
period,  an  argument  for  the  free-traders,  and  not  for  the 
protectionists.  The  free-traders  were  then  accustomed  to 
point  to  the  higher  wages  of  labor  in  the  United  States 
as  an  insuperable  obstacle  to  the  successful  establish- 
ment of  manufactures.  They  used  the  wages  argument 
as  a  foil  to  the  young-industries  argument,  asserting  that 
as  long  as  wages  were  so  much  lower  in  Europe,  manufac- 
turers would  not  be  able  to  maintain  themselves  without 
aid  from  the  government.  The  protectionists,  on  the 
other  hand,  felt  called  on  to  explain  away  the  difference 
of  wages ;  they  endeavored  to  show  that  this  difference 
was  not  so  great  as  was  commonly  supposed,  and  that,  so 
far  as  it  existed,  it  afforded  no  good  reason  against  adopt- 
ing protection.1     About   1840,  the  positions  of  the  con- 

1  See,  among  others,  Clay's  Tariff  Speech  of  1824,  "  Works,"  I.,   465, 
466. 


66  PROTECTION  TO   YOUNG  INDUSTRIES. 

tending  parties  began  to  change.1  The  protectionists  be- 
gan to  take  the  offensive  on  the  labor  question :  the  free- 
traders were  forced  to  the  defensive  on  this  point.  The 
protectionists  asserted  that  high  duties  were  necessary  to 
shut  out  the  competition  of  the  ill-paid  laborers  of  Eu- 
rope, and  to  maintain  the  high  wages  of  the  laborers  of  the 
United  States.  Their  opponents  had  to  explain  and  de- 
fend on  the  wages  question.  Obviously  this  change  in  the 
line  of  argument  indicates  a  change  in  the  industrial  situa- 
tion. Such  an  argument  in  favor  of  protection  could  not 
have  arisen  at  a  time  when  protective  duties  existed  but  in 
small  degree,  and  when  wages  nevertheless  were  high.  Its 
use  implies  the  existence  of  industries  which  are  supposed 
to  be  dependent  on  high  duties.  When  the  protective 
system  had  been  in  force  for  some  time,  and  a  body  of  in- 
dustries had  sprung  up  which  were  thought  to  be  able  to 
pay  current  wages  only  if  aided  by  high  duties,  the  wages 
argument  naturally  suggested  itself.     The  fact  that  the 

1  Same  signs  of  the  appeal  for  the  benefit  of  labor  appear  as  early  as  1831 
in  a  passage  in  Gallatin's  "  Memorial,''  p.  31,  and  again  in  a  speech  of  Web- 
ster's in  1833,  "Works,"  I.,  283.  In  the  campaign  of  1840,  little  was 
heard  of  it,  doubtless  because  other  issues  than  protection  were  in  the 
foreground.  Yet  Calhoun  was  led  to  make  a  keen  answer  to  it  in  a  speech 
of  1S40,  "  Works,"  III.,  434.  In  the  debates  on  the  tariff  act  of  1842,  we 
hear  more  of  it ;  see  the  speeches  of  Choate  and  Buchanan,  Congr.  Globe, 
1841-42,  pp.  950,  953,  and  Calhoun's  allusion  to  Choate,  in  Calhoun's 
"Works,"  IV.,  207.  In  1846  the  argument  appeared  full-fledged,  in  the 
speeches  of  Winthrop,  Davis,  and  others,  Congr.  Globe,  1846,  Appendix, 
pp.,  967,  973,  1 1 14.  See  also  a  characteristic  letter  in  Niles,  vol.  62,  p. 
262.  Webster's  speech  in  1846,  "  Works,"  V.,  231,  had  much  about  pro- 
tection and  labor,  but  in  a  form  somewhat  different  from  that  of  the  argu- 
ment we  are  nowadays  familiar  with. 


CONCLUDING  REMARKS,  6? 

iron  manufacture,  which  had  hitherto  played  no  great 
part  in  the  protective  controversy,  became,  after  1840, 
the  most  prominent  applicant  for  aid,  accounts  in  large 
part  for  the  new  aspect  of  the  controversy.  The  use 
of  the  wages  argument,  and  the  rise  of  the  economic 
school  of  Henry  C.  Carey,  show  that  the  argument  for 
young  industries  was  felt  to  be  no  longer  sufficient  to  be 
the  mainstay  of  the  protective  system.  The  economic 
situation  had  changed,  and  the  discussion  of  the  tariff 
underwent  a  corresponding  change. 


THE  EARLY  PROTECTIVE  MOVEMENT 
AND  THE  TARIFF  OF  1828. 


In  the  present  essay  we  shall  consider,  not  so  much  the 
economic  effect  of  the  tariff,  as  the  character  of  the  early 
protective  movement  and  its  effect  on  political  events 
and  on  legislation. 

The  protective  movement  in  this  country  has  been  said 
to  date  from  the  year  1789,  even  from  before  1789;  and 
more  frequently  it  has  been  said  to  begin  with  the  tariff 
act  of  1 8 16.  But  whatever  may  have  been,  in  earlier  years, 
the  utterances  of  individual  public  men,  or  the  occasional 
drift  of  an  uncertain  public  opinion,  no  strong  popular 
movement  for  protection  can  be  traced  before  the  crisis 
of  1 8 18-19.  The  act  of  18 16,  which  is  generally  said  to 
mark  the  beginning  of  a  distinctly  protective  policy  in 
this  country,  belongs  rather  to  the  earlier  series  of  acts, 
beginning  with  that  of  1789,  than  to  the  group  of  acts  of 
1824,  1828,  and  1832.  Its  highest  permanent  rate  of  duty 
was  twenty  per  cent.,  an  increase  over  the  previous  rates 
which  is  chiefly  accounted  for  by  the  heavy  interest  charge 
on  the  debt  incurred  during  the  war.  But  after  the  crash 
of  1819,  a  movement   in  favor  of  protection  set  in,  which 

68 


THE  EARLY  PROTECTIVE  MOVEMENT.  69 

was  backed  by  a  strong  popular  feeling  such  as  had  been 
absent  in  the  earlier  years.  The  causes  of  the  new  move- 
ment are  not  far  to  seek.  On  the  one  hand  there  was  a 
great  collapse  in  the  prices  of  land  and  of  agricultural 
products,  which  had  been  much  inflated  during  the  years 
from  1815  to  1818.  At  the  same  time  the  foreign  market 
for  grain  and  provisions,  which  had  been  highly  profitable 
during  the  time  of  the  Napoleonic  wars,  and  which  there 
had  been  a  spasmodic  attempt  to  regain  for  two  or  three 
years  after  the  close  of  our  war  in  1 8 1 5,  was  almost  entirely 
lost.  On  the  other  hand,  a  large  number  of  manufacturing 
industries  had  grown  up,  still  in  the  early  stages  of  growth, 
and  still  beset  with  difficulties,  yet  likely  in  the  end  to 
hold  their  own  and  to  prosper.  That  disposition  to  seek 
a  remedy  from  legislation,  which  always  shows  itself  after 
an  industrial  crisis,  now  led  the  farmers  to  ask  for  a  home 
market,  while  the  manufacturers  wanted  protection  for 
young  industries.  The  distress  that  followed  the  crisis 
brought  out  a  plentiful  crop  of  pamphlets  in  favor  of  pro- 
tection, of  societies  and  conventions  for  the  promotion  of 
domestic  industry,  of  petitions  and  memorials  to  Congress 
for  higher  duties.  The  movement  undoubtedly  had  deep 
root  in  the  feelings  and  convictions  of  the  people,  and  the 
powerful  hold  which  protective  ideas  then  obtained  influ- 
enced the  policy  of  the  nation  long  after  the  immediate 
effects  of  the  crisis  had  ceased  to  be  felt.1 

1  The  character  of  the  protective  movement  after  1819  is  best  illustrated 
by  the  numerous  pamphlets  of  Matthew  Cary.     See  especially  the  "  Appeal 


JO  THE  EARLY  PROTECTIVE  MOVEMENT. 

The  first  effect  of  this  movement  was  seen  in  a  series 
of  measures  which  were  proposed  and  earnestly  pushed 
in  Congress  in  the  session  of  1819-20.  They  included  a 
bill  for  a  general  increase  of  duties,  one  for  shortening 
credits  on  duties,  and  one  for  taxing  sales  by  auction  of 
imported  goods.  The  first  of  these  very  nearly  took  an 
important  place  in  our  history,  for  it  was  passed  by  the 
House,  and  failed  to  pass  the  Senate  by  but  a  single  vote. 
Although  it  did  not  become  law,  the  protective  movement 
which  was  expressed  in  the  votes  and  speeches  on  it  re- 
mained unchanged  for  several  years,  and  brought  about 
the  act  of  1824,  while  making  possible  the  act  of  1828. 
Some  understanding  of  the  state  of  feeling  in  the  differ- 
ent sections  of  the  country  is  necessary  before  the  peculiar 
events  of  1828  can  be  made  clear,  and  it  may  be  conven- 
iently reached  at  this  point. 

The  stronghold  of  the  protective  movement  was  in  the 
Middle  and  Western  states  of  those  days — in  New  York, 
New  Jersey,  Pennsylvania,  Ohio,  and  Kentucky.  They 
were  the  great  agricultural  States  ;  they  felt  most  keenly 
the  loss  of  the  foreign  market  of  the  early  years  of  the 
century,  and  were  appealed  to  most  directly  by  the  cry  for  a 
home  market.  At  the  same  time  they  had  been  most  deep- 
ly involved  in  the  inflation  of  the  years  18 16-  19,  and  were 
in  that  condition  of  general  distress  and  confusion  which 

to  Common  Sense  and  Common  Justice  "  (1822)  and  "  The  Crisis  :  A  Sol- 
emn Appeal,"  etc.  (1823).  "  Niles's  Register,"  which  had  said  little  about 
tariff  before  1 819,  thereafter  became  a  tireless  and  effective  advocate  of 
protection. 


THE  EARLY  PROTECTIVE  MOVEMENT.  J I 

leads  people  to  look  for  some  panacea.  The  idea  of  pro- 
tection as  a  cure  for  their  troubles  had  obtained  a  strong 
hold  on  their  minds.  It  is  not  surprising,  when  we  consider 
the  impetuous  character  of  the  element  in  American  democ- 
racy at  that  time  represented  by  them,  that  the  idea  was 
applied  in  a  sweeping  and  indiscriminate  manner.  They 
wanted  protection  not  only  for  the  manufactures  that 
were  to  bring  them  a  home  market,  but  for  many  of  their 
own  products,  such  as  wool,  hemp,  flax,  even  for  wheat 
and  corn.  For  the  two  last  mentioned  they  asked  aid 
more  particularly  in  the  form  of  higher  duties  on  rum 
and  brandy,  which  were  supposed  to  compete  with  spirits 
distilled  from  home-grown  grain.  A  duty  on  molasses 
was  a  natural  supplement  to  that  on  rum.  Iron  was  al- 
ready produced  to  a  considerable  extent  in  Pennsylvania 
and  New  Jersey,  and  for  that  also  protection  was  asked. 
In  New  England  there  was  a  strong  opposition  to  many 
of  these  demands.  The  business  community  of  New 
England  was  still  made  up  mainly  of  importers,  deal- 
ers in  foreign  goods,  shipping  merchants,  and  vessel- 
owners,  who  naturally  looked  with  aversion  at  measures 
that  tended  to  lessen  the  volume  of  foreign  trade.  More- 
over, they  had  special  objections  to  many  of  the  duties 
asked  for  by  the  agricultural  states.  Hemp  in  the 
form  of  cordage,  flax  in  the  form  of  sail  duck,  and  iron, 
were  important  items  in  the  cost  of  building  and  equip- 
ping ships.  The  duties  on  molasses  and  rum  were  aimed  at 
an  industry  carried  on  almost  exclusively  in  New  England  : 


72  THE  EARLY  PROTECTIVE   MOVEMENT. 

the  importation  of  molasses  from  the  West  Indies  in  ex- 
change for  fish,  provisions,  and  lumber,  and  its  subsequent 
manufacture  into  rum.  Wool  was  the  raw  material  of  a 
rapidly  growing  manufacture.  So  far  the  circumstances 
led  to  opposition  to  the  protective  movement.  On  the 
other  hand,  the  manufacture  of  cotton  and  woollen  goods 
was  increasing  rapidly  and  steadily,  and  was  the  moving 
force  of  a  current  in  favor  of  protection  that  became 
stronger  year  by  year.  We  have  seen  that  the  beginning 
of  New  England's  manufacturing  career  dates  back  to  the 
War  of  1 8 12.  Before  1820  she  was  fairly  launched  on  it, 
and  between  1820  and  1830  she  made  enormous  advances. 
The  manufacturers  carried  on  a  conflict,  unequal  at  first, 
but  rapidly  becoming  less  unequal,  with  the  merchants 
and  ship-owners.  As  early  as  1820  Connecticut  and 
Rhode  Island  were  pretty  firmly  protective ;  but  Massa- 
chusetts hesitated.  Under  the  first  weight  of  the  crisis  of 
1 819,  the  protective  feeling  was  strong  enough  to  cause  a 
majority  of  her  congressmen  to  vote  for  the  bill  of  1820. 
But  there  was  great  opposition  to  that  bill,  and  after  1820 
the  protective  feeling  died  down.1  In  1824  Massachusetts 
was  still  disinclined  to  adopt  the  protective  system,  and  it 
was   not   until    the   end    of   the  decade   that  she   came 

1  The  vote  on  the  bill  of  1820,  by  States,  is  given  in  Niles,  XVIII., 
169.  Of  the  Massachusetts  members  19  voted  yes,  6  no,  and  4  were  ab- 
sent. Of  the  New  England  members  19  voted  yes,  9  no,  and  9  were  ab- 
sent. The  opposition  to  the  bill  in  Massachusetts  was  the  occasion  of  a 
meeting  at  which  Webster  made  his  first  speech  on  tariff,  which  is  not  re- 
printed in  his  works,  but  may  be  found  in  the  newspapers  of  the  day. 


THE  EARLY  PROTECTIVE   MOVEMENT.  73 

squarely  in  line  with  the  agricultural  states  on  that  sub- 
ject. 

The  South  took  its  stand  against  the  protective  system 
with  a  promptness  and  decision  characteristic  of  the  po- 
litical history  of  the  slave  states.  The  opposition  of  the 
Southern  members  to  the  tariff  bill  of  1820  is  significant 
of  the  change  in  the  nature  of  the  protective  movement 
between  1816  and  1820.  The  Southern  leaders  had  advo- 
cated the  passage  of  the  act  of  1816,  but  they  bitterly  op- 
posed the  bill  of  1820.  It  is  possible  that  the  Missouri 
Compromise  struggle  had  opened  their  eyes  to  the  con- 
nection between  slavery  and  free  trade.1  At  all  events, 
they  had  grasped  the  fact  that  slavery  made  the  growth  of 
manufactures  in  the  South  impossible,  that  manufactured 
goods  must  be  bought  in  Europe  or  in  the  North,  and 
that,  wherever  bought,  a  protective  tariff  would  tend  to 
make  them  dearer.  Moreover,  Cotton  was  not  yet  King, 
and  the  South  was  not  sure  that  its  staple  was  indispensa- 
ble for  all  the  world.  While  the  export  of  cotton  on  a 
large  scale  had  begun,  it  was  feared  that  England,  in  re- 
taliation for  high  duties  on  English  goods,  might  tax  or 
exclude  American  cotton. 

Such  was  in  1820  the  feeling  in  regard  to  the  protective 
system  in  the  different  parts  of  the  country.  After  the 
failure  of  the  bill  of  that  year,  the  movement  for  higher 
duties  seems  for  a  while  to  have  lost  headway.     The  low- 

1  But  no  reference  was  made  to  the  Missouri  struggle  in  the  debates  on 
the  tariff  bill  of  1820. 


74  THE   EARLY  PROTECTIVE  MOVEMENT. 

est  point  of  industrial  and  commercial  depression,  so  far 
as  indicated  by  the  revenue,  was  reached  at  the  close  of 
1820,  and,  as  affairs  began  to  mend,  protective  measures 
received  less  vigorous  support.  Bills  to  increase  duties, 
similar  to  the  bill  of  1820,  were  introduced  in  Congress  in 
1 82 1  and  1822,  but  they  were  not  pressed  and  led  to  no 
legislation.1 

Public  opinion  in  most  of  the  Northern  States,  how- 
ever, continued  to  favor  protection  ;  the  more  so  because, 
after  the  first  shock  of  the  crisis  of  18 19  was  over,  recov- 
ery, though  steady,  was  slow.  As  a  Presidential  election 
approached  and  caused  public  men  to  respond  more 
readily  to  popular  feeling,  the  protectionists  gained  a  de- 
cided victory.  The  tariff  of  1824  was  passed,  the  first  and 
the  most  direct  fruit  of  the  early  protective  movement. 
The  Presidential  election  of  that  year  undoubtedly  had  an 
effect  in  causing  its  passage  ;  but  the  influence  of  politics 
and  political  ambition  was  in  this  case  hardly  a  harmful 
one.  Not  only  Clay,  the  sponsor  of  the  American  System, 
but  Adams,  Crawford,  and  Jackson  were  declared  advo- 
cates of  protection.  Party  lines,  so  far  as  they  existed  at 
all,  were  not  regarded  in  the  vote  on  the  tariff.  It  was 
carried  mainly  by  the  votes  of  the  Western  and   Middle 

1  See  the  interesting  account  of  a  Cabinet  meeting  in  November,  1S21, 
in  "J.  Q.  Adams's  Memoirs,"  vol.  V.,  pp.  408-411.  "  The  lowest  point  of 
the  depression  was  reached  at  the  close  of  last  year"  [1820].  Calhoun 
thought  "  the  prosperity  of  the  manufacturers  was  now  so  clearly  estab- 
lished that  it  might  be  mentioned  in  the  message  as  a  subject  for  congratu- 
lation." Crawford  said  "  there  would  not  be  much  trouble  in  the  ensuing 
session  with  the  manufacturing  interest,"  and  Adams  himself  "  had  no  ap- 
prehension that  there  would  be  much  debate  on  manufacturing  interests." 


THE  EARLY  PROTECTIVE  MOVEMENT.  f$ 

states.  The  South  was  in  opposition,  New  England  was 
divided  ;  Rhode  Island  and  Connecticut  voted  for  the  bill, 
Massachusetts  and  the  other  New  England  states  were 
decidedly  opposed.1 

The  opposition  of  Massachusetts  was  the  natural  result 
of  the  character  of  the  new  tariff.  The  most  important 
changes  made  by  it  were  in  the  increased  duties  on  iron, 
lead,  wool,  hemp,  cotton-bagging,  and  other  articles  whose 
protection  was  desired  chiefly  by  the  Middle  and  Western 
States.  The  duties  on  textile  fabrics,  it  is  true,  were  also 
raised.  Those  on  cotton  and  woollen  goods  went  up  from 
25  to  33J  percent.  This  increase,  however,  was  offset,  so 
far  as  woollens  were  concerned,  by  the  imposition  of  a 
duty  of  30  per  cent,  on  wool,  which  had  before  been  ad- 
mitted at  15  per  cent.  The  manufacturers  of  woollen 
goods  were,  therefore,  as  far  as  the  tariff  was  concerned, 
in  about  the  same  position  as  before.2    The  heavier  duties 

1  John  Randolph  said,  in  his  vigorous  fashion,  of  the  tariff  bill  of  1824  : 
"  The  merchants  and  manufacturers  of  Massachusetts  and  New  Hampshire 
repel  this  bill,  while  men  in  hunting  shirts,  with  deerskin  leggings  and 
moccasins  on  their  feet,  want  protection  from  home  manufactures." — "  De- 
bates of  Congress,  1824,  p.  2370. 

2  This  can  be  shown  very  easily.  The  cost  of  the  wool  is  about  one  half 
the  cost  of  making  woollen  goods.     Then  we  have  in  1816  : 

Duty  on  woollens         .         .         .         .  25  percent. 

Deduct  duty  on  wool,  ^  of  15  cent.  .     7^  " 

Net  protection  in  1816     ....  17^  '    " 
And  in  1824  we  have: 

Duty  on  woollens  .....  33^  per  cent. 

Deduct  duty  on  wool,  ^  of  30  per  cent.  .15  " 

Net  protection  in  1824         .         .         .  i8£  " 

The  rise  in  duties  both  on  wool  and  on  woollens  took  place  gradually  by 
the  terms  of  the  act  of  1824.  The  calculation  is  based  on  the  final  rates, 
which  were  reached  in  1826. 


?6  THE  EARLY  PROTECTIVE  MOVEMENT. 

on  iron  and  hemp,  on  the  other  hand,  were  injurious  to  the 
ship-builders. 

The  manufacture  of  textiles  was  rapidly  extending  in 
all  the  New  England  States.  At  first  that  of  cottons  re- 
ceived most  attention,  and  played  the  most  important 
part  in  the  protective  controversy.  But  by  1824  the 
cotton  industry  was  firmly  established  and  almost  inde- 
pendent of  support  by  duties.  The  woollen  manufacture 
was  in  a  less  firm  position,  and  in  1824  became  the  promi- 
nent candidate  for  protection.  Between  1824  and  1828  a 
strong  movement  set  in  for  higher  duties  on  woollens, 
which  led  eventually  to  some  of  the  most  striking  features 
of  the  tariff  act  of  1828. 

The  duties  proposed  and  finally  established  on  wool- 
lens were  modelled  on  the  minimum  duty  of  18 16  on 
cottons.  By  the  tariff  act  of  that  year,  it  will  be  remem- 
bered, cotton  goods  were  made  subject  to  a  general  ad 
valorem  duty  of  25  per  cent. ;  but  it  was  further  provided 
that  "all  cotton  cloths,  whose  value  shall  be  less  than  25 
cents  per  square  yard,  shall  be  taken  and  deemed  to  have 
cost  25  cents  per  square  yard,  and  shall  be  charged  with 
duty  accordingly."  That  is,  a  specific  duty  of  six  and  a 
quarter  cents  a  square  yard  was  imposed  on  all  cotton 
cloths  costing  twenty-five  cents  a  square  yard  or  less.  The 
minimum  duties,  originally  intended  to  affect  chiefly  East 
Indian  goods  and  goods  made  from  East  Indian  cotton, 
had  an  effect  in  practice  mainly  on  goods  from  England, 
whether  made  of  American  or  of  Indian  cotton.  In  a  few 


THE  EARLY  PROTECTIVE  MOVEMENT.  JJ 

years,  as  the  use  of  the  power  loom  and  other  improve- 
ments in  manufacture  brought  the  price  of  coarse  cottons 
much  below  twenty-five  cents,  the  minimum  duties  be- 
came prohibitory.  How  far  they  were  needed  in  order  to 
promote  the  success  and  prosperity  of  the  cotton  manu- 
facture in  years  following  their  imposition,  we  have 
already  discussed.1  At  all  events,  whether  or  not  in 
consequence  of  the  duties,  large  profits  were  made  by 
those  who  entered  on  it,  and  in  a  few  years  the  cheaper 
grades  of  cotton  cloth  were  produced  so  cheaply,  and  of 
such  good  quality,  that  the  manufacturers  freely  asserted 
that  the  duty  had  become  nominal,  and  that  foreign  com- 
petition no  longer  was  feared. 

This  example  had  its  effect  on  the  manufacturers  of 
woollen  goods,  and  on  the  advocates  of  protection  in  gen- 
eral. In  the  tariff  bill  of  1820,  minimum  duties  on  linen 
and  on  other  goods  had  been  proposed.  In  1824  an  ear- 
nest effort  was  made  to  extend  the  minimum  system  to 
woollens.  The  committee  which  reported  the  tariff  bill 
of  that  year  recommended  the  adoption  in  regard  to 
woollens  of  a  proviso  framed  after  that  of  the  tariff  of 
1 8 16  in  regard  to  cottons,  the  minimum  valuation  being 
eighty  cents  a  yard.  The  House  first  lowered  the  valua- 
tion to  forty  cents  and  finally  struck  out  the  whole  proviso 
by  a  scant  majority  of  three  votes.8  There  was  one  great 
obstacle  in  the  way  of  a  high   duty  on  cheap   woollen 

1  See  above,  pp.  25-36. 

*  The  vote  was  104  to  101.      "  Annals  of  Congress,"'  1823-24,  p.  2310. 


78  THE   EARLY  PROTECTIVE  MOVEMENT, 

goods :  they  were  imported  largely  for  the  use  of  slaves 
on  Southern  plantations.  Tender  treatment  of  the  pecul- 
iar institution  had  already  begun,  and  there  was  strong 
opposition  to  a  duty  which  had  the  appearance  of  being 
aimed  against  the  slave-holders.  The  application  of  the 
minimum  principle  to  other  than  cheap  woollen  goods 
apparently  had  not  yet  been  thought  of;  but  the  idea  was 
obvious,  and  soon  was  brought  forward. 

After  1824  there  was  another  lull  in  the  agitation  for 
protection.  Trade  was  buoyant  in  1825,  and  production 
profitable.  For  the  first  time  since  18 18  there  was  a 
swing  in  business  operations.  This  seems  to  have  been 
particularly  the  case  with  the  woollen  manufacturers. 
During  the  years  from  181 5  to  18 18-19,  they,  like  other 
manufacturers,  had  met  with  great  difficulties;  and  when 
the  first  shock  of  the  crisis  of  the  latter  year  was  over, 
matters  began  to  mend  but  slowly.  About  1824,  however, 
according  to  the  accounts  both  of  their  friends  and  of 
their  opponents  on  the  tariff  question,  they  extended 
their  operations  largely.1  It  is  clear  that  this  expansion, 
such  as  it  was,  was  not  the  effect  of  any  stimulus  given  by 
the  tariff  of  1824,  for,  as  we  have  seen,  the  encouragement 
given  the  woollen  manufacturers  by  that  act  was  no 
greater  than  had  been  given  under  the  act  of  1816.  At 
all  events,  the  upward  movement  lasted  but  a  short  time. 

1  See  the  Report  of  the  Harrisburg  Convention  of  1827  in  Niles, 
XXXIII.,  109;  Tibbits,  "Essay  on  Home  Market"  (1827),  pp.  26,  27; 
Henry  Lee,  "  Boston  Report  of  1S27,"  pp.  64  seq. 


THE  EARLY  PROTECTIVE  MOVEMENT.  fg 

In  England  a  similar  movement  had  been  carried  to  the 
extreme  of  speculation  and  had  resulted  in  the  crisis  of 
1825-26.  From  England  the  panic  was  communicated  to 
the  United  States  ;  but,  as  the  speculative  movement  had 
not  been  carried  so  far  in  this  country,  the  revulsion  was 
less  severely  felt.  It  seems,  however,  to  have  fallen  on 
the  woollen  manufacturers  with  peculiar  weight.  Parlia- 
ment, it  so  happened,  in  1824  had  abolished  almost  en- 
tirely the  duty  on  wool  imported  into  England.  It  went 
down  from  twelve  pence  to  one  penny  a  pound.1  The 
imports  of  woollen  goods  into  the  United  States  had  in 
1825  been  unusually  large  ;  the  markets  were  well  stocked  ; 
the  English  manufacturers  were  at  once  enabled  to  sell 
cheaply  by  the  lower  price  of  their  raw  material,  and 
pushed  to  do  so  by  the  depression  of  trade. 

A  vigorous  effort  was  now  made  to  secure  legislative 
aid  to  the  woollen  makers,  similar  to  that  given  the  cotton 
manufacturers.  Massachusetts  was  the  chief  seat  of  the 
woollen  industry.  The  woollen  manufacturers  held  meet- 
ings in  Boston  and  united  for  common  action,  and  it  was 
determined  to  ask  Congress  to  extend  the  minimum  sys- 

1  It  is  sometimes  said  that  this  reduction  of  the  wool  duty  in  England 
was  undertaken  with  the  express  purpose  of  counteracting  the  protective 
duties  imposed  on  woollens  in  the  United  States.  But  there  is  little  ground 
for  supposing  that  our  duties  were  watched  so  vigilantly  in  England,  01 
were  the  chief  occasion  for  English  legislation.  The  agitation  for  getting 
rid  of  the  restriction  on  the  import  and  export  of  wool  began  as  early  as 
1819,  and  during  its  course  very  little  reference,  if  any,  was  made  to  the 
American  duties.  See  the  sketch  in  Bischoff's  "History  of  the  Woollen 
and  Worsted  Manufactures,"  vol.  IT.,  chapters  1  and  2. 


80  THE  EARLY  PROTECTIVE  MOVEMENT. 

tern  to  woollen  goods.1  The  legislature  of  the  State 
passed  resolutions  asking  for  further  protection  for  wool- 
lens, and  these  resolutions  were  presented  in  the  federal 
House  of  Representatives  by  Webster.2  A  deputation  of 
manufacturers  was  sent  to  Washington  to  present  the 
case  to  the  committee  on  manufactures.  Their  efforts 
promised  to  be  successful.  When  Congress  met  for  the 
session  of  1826-27,  the  committee  (which  in  those  days 
had  charge  of  tariff  legislation)  reported  a  bill  which  gave 
the  manufacturers  all  they  asked  for. 

This  measure  contained  the  provisions  which,  when 
finally  put  in  force  in  the  tariff  of  1828,  became  the  object 
of  the  most  violent  attack  by  the  opponents  of  protec- 
tion. It  made  no  change  in  the  nominal  rate  of  duty, 
which  was  to  remain  at  33^  per  cent.  But  minimum  val- 
uations were  added,  on  the  plan  of  the  minima  on  cottons, 
in  such  a  way  as  to  carry  the  actual  duty  far  beyond  the 
point  indicated  by  the  nominal  rate.  The  bill  provided 
that  all  goods  costing  less  than  40  cents  a  square  yard 
were  to  pay  duty  as  if  they  had  cost  40  cents ;  all  costing 
more  than  40  cents  and  less  than  $2.50  were  to  be  charged 
as  if  they  had  cost  $2.50 ;  all  costing  between  $2.50  and 
$4.00  to  be  charged  as  if  they  had  cost  $4.00.     A  similar 

1  The  memorial  of  the  manufacturers  to  Congress  is  in  Niles,  XXXI., 
1S5.  It  asks  for  minimum  duties,  on  the  ground  that  ad  valorem  duties 
are  fraudulently  evaded.  For  the  circular  sent  out  by  this  committee,  see 
ibid.,  p.  200. 

2  "American  State  Papers,  Finance,"  V.,  599  ;  "  Annals  of  Congress," 
1826-27,  P-  1010. 


-THE  EARLY  PROTECTIVE  MOVEMENT.  8 1 

course  was  proposed  in  regard  to  raw  wool.  The  ad  valo- 
rem rate  on  raw  wool  was  to  be  30  per  cent,  in  the  first 
place,  and  to  rise  by  steps  to  40  per  cent. ;  and  it  was  to 
be  charged  on  all  wool  costing  between  16  cents  and 
40  cents  a  pound  as  if  the  wool  had  cost  40  cents.  The 
effect  of  this  somewhat  complicated  machinery  was  evi- 
dently to  levy  specific  duties  both  on  wool  and  on  wool- 
lens. On  wool  the  duty  was  to  be,  eventually,  16  cents  a 
pound.  On  woollens  it  was  to  be  13^  cents  a  yard  on 
woollens  of  the  first  class,  83J  cents  on  those  of  the 
second  class,  and  $1.33^-  on  those  of  the  third  class. 

The  minimum  system,  applied  in  this  way,  imposed  ad 
valorem  duties  in  form,  specific  duties  in  fact.  It  had 
some  of  the  disadvantages  of  both  systems.  It  offered 
temptations  to  fraudulent  undervaluation  stronger  than 
those  offered  by  ad  valorem  duties.  For  example,  under 
the  bill  of  1827,  the  duty  on  goods  worth  in  the  neigh- 
borhood of  40  cents  a  yard  would  be  13^  cents  if  the 
value  was  less  than  40  cents  ;  but  if  the  value  was  more 
than  40  cents,  the  duty  would  be  83J  cents.  If  the  value 
could  be  made  to  appear  less  than  forty  cents,  the  im- 
porter saved  70  cents  a  yard  in  duties.  Similarly,  at  the 
next  step  in  the  minimum  points,  the  duty  was  83^  cents 
if  the  goods  were  worth  less  than  $2.50,  and  $1.33 \  cents 
if  the  goods  were  worth  more  than  $2.50.  The  tempta- 
tion to  undervalue  was  obviously  very  strong  under  such 
a  system,  in  the  case  of  all  goods  which  could  be  brought 
with   any  plausibility  near  one  of   the  minimum   points. 


-82  THE  EARLY  PROTECTIVE  MOVEMENT. 

On  the  other  hand,  the  system  had  the  want  of  elasticity 
which  goes  with  specific  duties.  All  goods  costing  be- 
tween 40  cents  and  $2.50  were  charged  with  the  same 
duty,  so  that  cheap  goods  were  taxed  at  a  higher  rate 
than  dear  goods.  The  great  gap  between  the  first  and 
second  minimum  points  (40  cents  and  $2.50)  made  this 
objection  the  stronger.  But  that  gap  was  not  the  result 
of  accident.  It  was  intended  to  bring  about  a  very  heavy 
duty  on  goods  of  the  grade  chiefly  manufactured  in  this 
country.  The  most  important  domestic  goods  were 
worth  about  a  dollar  a  yard,  and  their  makers,  under  this 
bill,  would  get  a  protective  duty  of  83^-  cents  a  yard.  The 
object  was  to  secure  a  very  high  duty,  while  retaining 
nominally  the  existing  rate  of  33^  per  cent. 

The  woollens  bill  of  1827  had  a  fate  similar  to  that  of 
the  general  tariff  bill  of  1820.  It  was  passed  in  the 
House,  but  lost  in  the  Senate  by  the  casting  vote  of  the 
Vice-President.  In  the  House  the  Massachusetts  mem- 
bers, with  one  exception,  voted  for  it,  and  both  Senators 
from  Massachusetts  supported  it.1 

This  bill  having  failed,  the  advocates  of  protection  de- 
termined to  continue  their  agitation,  and  to  give  it  wider 
scope.  A  national  convention  of  protectionists  was  de- 
termined on.2     Meetings  were  held  in  the  different  States 

1  "  Congressional  Debates,"  III.,  1099,  496. 

2  It  is  not  very  clear  in  what  quarter  the  scheme  of  holding  such  a  con- 
vention had  its  origin.  The  first  public  suggestion  came  from  the  Phila- 
delphia  Society  for  the  Promotion  of  Domestic  Industry,  an  association 
founded  by  Hamilton,  of  which  Matthew  Carey  and  C.  J.  Ingersoll  were  at 
this  time  the  leading  spirits. 


THE  EARLY  PROTECTIVE  MOVEMENT.  83 

in  which  the  protective  policy  was  popular,  and  delegates 
were  appointed  to  a  general  convention.  In  midsummer 
of  1827  about  a  hundred  persons  assembled  at  Harris- 
burg,  and  held  the  Harrisburg  convention,  well  known  in 
its  day.  Most  of  the  delegates  were  manufacturers,  some 
were  newspaper  editors  and  pamphleteers,  a  few  were 
politicians.1  The  convention  did  not  confine  its  attention 
to  wool  and  woollens.  It  considered  all  the  industries 
which  were  supposed  to  need  protection.  It  recom- 
mended higher  duties  for  the  aid  of  agriculture  ;  others 
on  manufactures  of  cotton,  hemp,  flax,  iron,  and  glass  ; 
and  finally,  new  duties  on  wool  and  woollens.  The  move- 
ment was  primarily  for  the  aid  of  the  woollen  industry  ; 
other  interests  were  included  in  it  as  a  means  of  gaining 
strength.  The  duties  which  were  demanded  on  woollens 
were  on  the  same  plan  as  those  proposed  in  the  bill  of 
1827,  differing  only  in  that  they  were  higher.  The  ad  valo- 
rem rate  on  woollen  goods  was  to  be  40  per  cent,  in  the 
first  place,  and  was  to  be  raised  gradually  until  it  reached 
50  per  cent.  It  was  to  be  assessed  on  minimum  valua- 
tions of  fifty  cents,  two  dollars  and  a  half,  four  dollars, 
and  six  dollars  a  yard.  The  duty  on  wool  was  to  be 
twenty  cents  a  pound  in  the  first  instance,  and  was  to  be 
raised  each  year  by  2 J  .tents  until  it  should  reach  fifty 
cents  a  pound.     Needless  to  say,  the  duty  would  be  pro- 

1  Among  the  politicians  was  Mallary  of  Vermont,  who  had  been  chairman 
of  the  committee  on  manufactures  in  the  preceding  Congress,  and  became 
the  spokesman  of  the  protectionists  in  the  ensuing  session,  when  the  tariff 
of  1828  was  passed. 


84  THE  EARLY  PROTECTIVE  MOVEMENT. 

hibitory  long  before  this  limit  was  reached.    Wool  cost- 
ing less  than  eight  cents  was  to  be  admitted  free.1 

At  this  point  a  new  factor,  which  we  may  call  "  politics," 
began  to  make  itself  felt  in  the  protective  movement. 
The  natural  pressure  of  public  opinion  on  public  men  had 
exercised  its  effect  in  previous  years,  and  had  had  its 
share  in  bringing  about  the  tariff  act  of  1824  and  the 
woollens  bill  of  1827.  But  the  gradual  crystallization  of 
two  parties,  the  Adams  and  Jackson  parties, — Whigs  and 
Democrats,  as  they  soon  came  to  be  called — put  a  new 
face  on  the  political  situation,  and  had  an  unexpected 
effect  on  tariff  legislation.  The  contest  between  them 
had  begun  in  earnest  before  the  Harrisburg  convention 
met,  and  some  of  the  Jackson  men  alleged  that  the  con- 
vention was  no  more  than  a  demonstration  got  up  by  the 
Adams  men  as  a  means  of  bringing  the  protective  move- 
ment to  bear  in  their  aid  ;  but  this  was  denied,  and  such 
evidence  as  we  have  seems  to  support  the  denial.2     Yet 

1  The  proceedings  of  the  convention,  the  address  of  the  people,  the  me- 
morial to  Congress,  etc.,  are  in  Niles,  XXXII.  and  XXXIII. 

a  I  have  been  able  to  find  little  direct  evidence  as  to  the  political  bearing 
of  the  Harrisburg  convention.  Matthew  Carey,  in  a  letter  of  July,  1827, 
while  admitting  he  is  an  Adams  man,  protests  against  "  amalgamating  the 
question  of  the  presidency  with  that  for  the  protection  of  manufactures." 
Niles,  XXXII.,  389.  The  (New  York)  Evening  Post,  a  Jackson  paper, 
said  the  convention  was  a  manoeuvre  of  the  Adams  men  ;  see  its  issues  of 
August  1  and  August  9,  1827.  This  was  denied  in  the  National  Intelli- 
gencer (Adams)  of  July  9th,  and  also  in  the  (New  York)  American  (Adams)  of 
July  9th.  The  Evening  Post  admitted  (August  nth)  that  "  doubtless  many 
members  of  the  convention  were  innocent  of  political  views,"  and  that  "  the 
rest  were  induced  to  postpone  or  abandon  their  political  views."  Van 
Buren    apparently  suspected    that  the  convention  might  have  a  political 


THE  EARLY  PROTECTIVE   MOVEMENT.  8$ 

the  Adams  men  were  undoubtedly  helped  by  the  protec- 
tive movement.  Although  there  was  not  then,  nor  for  a 
number  of  years  after,  a  clear-cut  division  on  party  lines 
between  protectionists  and  so-called  free  traders,  the 
Adams  men  were  more  firmly  and  unitedly  in  favor  of 
protection  than  their  opponents.  Adams  was  a  protec- 
tionist, though  not  an  extreme  one ;  Clay,  the  leader 
and  spokesman  of  the  party,  was  more  than  any  other 
public  man  identified  with  the  American  system.  They 
were  at  least  willing  that  the  protective  question  should 
be  brought  into  the  foreground  of  the  political  contest.1 
The  position  of  the  Jackson  men,  on  the  other  hand, 

meaning,  and  warned  its  members  against  forming  "a  political  cabal"  ;  cf. 
the  National  Intelligencer  of  July  26th.  But  among  the  delegates  from 
New  York  were  both  Jackson  and  Adams  men.  See  Hammond,  "  Politi- 
cal History  of  New  York,"  II.,  256-258;  Niles,  XXXII.,  349.  Niles, 
who  was  an  active  member  of  the  convention,  denied  strenuously  that  poli- 
tics had  any  thing  to  do  with  it.  Niles,  XXXIV.,  187. — Since  the  above 
was  put  in  type,  however,  a  letter  of  Clay's  has  been  found  which  seems 
to  indicate  that  the  movement  for  holding  such  a  convention  was  at  least 
started  by  the  anti-Jackson  leaders.  The  letter  is  printed  in  the  "  Quar- 
terly Journal  of  Economics,"  vol.  II.,  July,  1SS8. 

1  There  is  ground  for  suspecting  that  the  Adams  party  would  have  been 
willing  to  make  the  tariff  question  the  decisive  issue  of  the  presidential 
campaign.  Clay  made  it  the  burden  of  his  speeches  during  his  journey  to 
the  West  in  the  early  summer  of  1827.  Very  soon  after  this,  however,  the 
correspondence  between  Jackson  and  Carter  Beverly  was  published,  and 
fixed  attention  on  the  "  bargain  and  corruption  "  cry.  That  was  the  point 
which  the  Jackson  managers  succeeded  in  making  most  prominent  in  the 
campaign.  Clay  dropped  the  question  of  protection  ;  he  found  enough  to 
do  in  answering  the  charge  that  in  1825  a  corrupt  bargain  had  made  Adams 
President  and  himself  Secretary  of  State.  See  Clay's  speech  at  Pittsburg. 
June  20,  1827,  in  Niles,  XXXII.,  299.  On  June  29th,  Clay  published 
his  first  denial  of  the  "bargain  and  corruption"  charges.  Ibid.,  p.  350 
Cf.  Parton,  "  Life  of  Jackson,"  III.,  in. 


86  THE  EARLY  PROTECTIVE  MOVEMENT 

was  a  very  difficult  one.  Their  party  had  at  this  time  no 
settled  policy  in  regard  to  the  questions  which  were  to  be 
the  subjects  of  the  political  struggles  of  the  next  twenty 
years.  They  were  united  on  only  one  point,  a  determi- 
nation to  oust  the  other  side.  On  the  tariff,  as  well  as  on 
the  bank  and  internal  improvements,  the  various  elements 
of  the  party  held  very  different  opinions.  The  Southern 
members,  who  were  almost  to  a  man  supporters  of  Jack- 
son, were  opposed  unconditionally  not  only  to  an  increase 
of  duties,  but  to  the  high  range  which  the  tariff  had  al- 
ready reached.  They  were  convinced,  and  in  the  main 
justly  convinced,  that  the  taxes  levied  by  the  tariff  fell 
with  peculiar  weight  on  the  slave  States,  and  their  opposi- 
tion was  already  tinged  with  the  bitterness  which  made 
possible,  a  few  years  later,  the  attempt  at  nullification  of 
the  tariff  of  1832.  On  the  other  hand,  the  protective 
policy  was  popular  throughout  the  North,  more  especially 
in  the  very  States  whose  votes  were  essential  to  Jackson, 
in  New  York,  Pennsylvania,  and  Ohio.  The  Jackson  men 
needed  the  votes  of  these  States,  and  were  not  so  confi- 
dent of  getting  them  as  they  might  reasonably  have  been. 
They  failed,  as  completely  as  their  opponents,  to  gauge 
the  strength  of  the  enthusiasm  of  the  masses  for  their 
candidate,  and  they  did  not  venture  to  give  the  Adams 
men  a  chance  of  posing  as  the  only  true  friends  of  domes- 
tic industry. 

The   twentieth   Congress   met   for    its   first    session   in 
December,    1827.     The  elections   of    1826,   at   which   its 


THE   EARLY  PROTECTIVE   MOVEMENT.  87 

members  were  chosen,  had  not  been  fortunate  for  the  ad- 
ministration. When  Congress  met  there  was  some  doubt 
as  to  the  political  complexion  of  the  House  ;  but  this  was 
set  at  rest  by  the  election  to  the  speakership  of  the  Dem- 
ocratic candidate,  Stephenson  of  Virginia.1  The  new 
Speaker,  in  the  formation  of  the  committees,  assumed  for 
his  party  the  direction  of  the  measures  of  the  House.  On 
the  committee  on  manufactures,  from  which  the  tariff 
report  and  the  tariff  bill  were  to  come,  he  appointed  five 
supporters  of  Jackson  and  two  supporters  of  Adams.  The 
chairmanship,  however,  was  given  to  one  of  the  latter, 
Mallary,  of  Vermont,  who,  it  will  be  remembered,  had 
been  a  member  of  the  Harrisburg  convention. 

Much  doubt  was  entertained  as  to  the  line  of  action  the 
committee  would  follow.  The  Adams  men  feared  at  first 
that  it  would  adopt  a  policy  of  simple  delay  and  inaction. 
This  fear  was  confirmed  when,  a  few  weeks  after  the 
beginning  of  the  session,  the  committee  asked  for  power 
to  send  for  persons  and  papers  in  order  to  obtain  more 
information  on  the  tariff, — a  request  which  was  opposed 
by  Mallary,  their  chairman,  on  the  ground  that  it  was 
made  only  as  a  pretext  for  delay.  The  Adams  men,  who 
formed  the  bulk  of  the  ardent  protectionists,  voted  with 
him  against  granting  the  desired  power.  But  the  South- 
ern  members    united   with    the   Jackson  men    from    the 

1  Stephenson's  election  is  said  to  have  been  brought  about  by  Van 
Buren's  influence;  Parton,  "Life  of  Jackson,"  III.,  135.  It  is  worth 
while  to  bear  this  in  mind,  in  view  of  the  part  played  by  Van  Buren  later 
in  the  session. 


88  THE   EARLY  PROTECTIVE  MOVEMENT. 

North,  and  between  them  they  secured  the  passage  of 
the  resolution  asked  by  the  committee.1  The  debate  and 
vote  on  the  resolution  sounded  the  key-note  of  the  events 
of  the  session.  They  showed  that  the  Jackson  men  from 
the  South  and  the  North,  though  opposed  to  each  other 
on  the  tariff  question,  were  yet  united  as  against  the 
Adams  men.2 

But  the  policy  of  delay,  if  such  in  fact  had  been  enter- 
tained by  the  opposition,  was  abandoned.  On  January 
31st,  the  committee  presented  a  report  and  a  draft  of  a 
tariff  bill,  which  showed  that  they  had  determined  on  a 
new  plan,  and  an  ingenious  one.  What  that  plan  was, 
Calhoun  explained  very  frankly  nine  years  later,  in  a 
speech  reviewing  the  events  of  1828  and  defending  the 
course  taken  by  himself  and  his  Southern  fellow-members.8 
A  high-tariff  bill  was  to  be  laid  before  the  House.  It  was 
to  contain  not  only  a  high  general  range  of  duties,  but 
duties  especially  high  on  those  raw  materials  on  which 
New  England  wanted  the  duties  to  be  low.  It  was  to 
satisfy  the  protective  demands  of  the  Western  and  Middle 
States,  and  at  the  same  time  to  be  obnoxious  to  the  New 
England  members.  The  Jackson  men  of  all  shades,  the 
protectionists  from  the  North  and  the  free-traders  from 


1  The  power  granted  to  the  committee  by  this  resolution,  to  examine 
witnesses,  was  used  to  a  moderate  extent.  A  dozen  wool  manufacturers 
were  examined,  and  their  testimony  throws  some  light  on  the  state  of  the 
woollen  manufacture  at  that  time.     See  the  preceding  essay,  pp.  42-44. 

2  In  "Congressional  Debates,"  IV.,  862,  870, 

3  Speech  of  1837  ;  "  Works,"  III.,  46-51. 


THE  EARLY  PROTECTIVE  MOVEMENT.  89 

the  South,  were  to  unite  in  preventing  any  amendments ; 
that  bill,  and  no  other,  was  to  be  voted  on.  When  the 
final  vote  came,  the  Southern  men  were  to  turn  around 
and  vote  against  their  own  measure.  The  New  England 
men,  and  the  Adams  men  in  general,  would  be  unable  to 
swallow  it,  and  would  also  vote  against  it.  Combined, 
they  would  prevent  its  passage,  even  though  the  Jackson 
men  from  the  North  voted  for  it.  The  result  expected  was 
that  no  tariff  bill  at  all  would  be  passed  during  the  session, 
which  was  the  object  of  the  Southern  wing  of  the  opposi- 
tion. On  the  other  hand,  the  obloquy  of  defeating  it 
would  be  cast  on  the  Adams  party,  which  was  the  object 
of  the  Jacksonians  of  the  North.  The  tariff  bill  would  be 
defeated,  and  yet  the  Jackson  men  would  be  able  to 
parade  as  the  true  "  friends  of  domestic  industry." 

The  bill  by  which  this  ingenious  solution  of  the  difficul- 
ties of  the  opposition  was  to  be  reached,  was  reported  to 
the  House  on  January  31st  by  the  committee  on  manu- 
factures.1 To  the  surprise  of  its  authors,  it  was  eventually 
passed  both  by  House  and  Senate,  and  became,  with  a 
few  unessential  changes,  the  tariff  act  of  1828. 

The  committee's  bill  in  the  first  place  proposed  a  large 
increase  of  duties  on  almost  all  raw  materials.  The  duty 
on  pig-iron  was  to  go  up  from  56  to  62J  cents  per  hun- 
dredweight, that  on  hammered  bar-iron  from  90  to  112 
cents  per  hundredweight,  and  that  on  rolled  bar  from  $30 

1  The  bill  as  reported  by  the  committee  is  printed  in  ' '  Congressional 
Debates,"  IV.,  1727  : 


90  THE  EARLY  PROTECTIVE  MOVEMENT. 

to  $37  per  ton.  The  increase  on  hammered  bar  had  been 
asked  by  the  Harrisburg  convention.  But  on  pig  and  on 
rolled  bar  no  one  had  asked  for  an  increase,  not  even  the 
manufacturers  of  iron  who  had  testified  before  the 
committee.1 

The  most  important  of  the  proposed  duties  on  raw 
materials,  however,  were  on  hemp,  flax,  and  wool.  The 
existing  duty  on  hemp  was  $35  per  ton.  It  was  proposed 
to  increase  it  immediately  to  $45,  and  further  to  increase 
it  by  an  annual  increment  of  $5,  till  it  should  finally  reach 
$60.  Hemp  of  coarse  quality  was  largely  raised  in  the 
country  at  that  time,  especially  in  Kentucky.  It  was 
suitable  for  the  making  of  common  ropes  and  of  cotton 
bagging,  and  for  those  purposes  met  with  no  competition 
from  imported  hemp.  Better  hemp,  suitable  for  making 
cordage  and  cables,  was  not  raised  in  the  country  at  all, 
the  supply  coming  exclusively  from  importation.  The 
preparation  of  this  better  quality  ("  water-rotted  "  hemp) 
required  so  much  manual  labor,  and  labor  of  so  disagree- 
able a  character,  that  it  would  not  have  been  undertaken 
in   any   event   by   the   hemp    growers   of   this  country.2 

1  See  the  testimony  of  the  three  iron  manufacturers  who  were  examined, 
"  American  State  Papers,  Finance,"  V.,  784-792.  Mallary,  in  introducing 
the  bill,  said  :  "  The  committee  gave  the  manufacturer  of  iron  all  he 
asked,  even  more."     "  Congressional  Debates,"  IV.,  1748. 

2  Gallatin,  "Memorial  of  the  Free-Trade  Convention  "  (1831),  p.  51. 
This  admirable  paper,  perhaps  the  best  investigation  on  tariff  subjects  ever 
made  in  the  United  States,  is  unfortunately  not  reprinted  in  the  edition  of 
Gallatin's  collected  works.  The  original  pamphlet  is  very  scarce.  The 
memorial  is  printed  in  U.  S.  Documents,  1st  session,  22d  Congress, 
Senate  Documents,  vol.  I.,  No.  55. 


THE  EARLY  PROTECTIVE  MOVEMENT.  9 1 

Under  such  conditions  an  increase  of  duty  on  hemp  could 
be  of  no  benefit  to  the  American  grower.  Its  effect 
would  be  simply  to  burden  the  rope-makers  and  the  users 
of  cordage,  and  ultimately  the  ship-builders  and  ship- 
owners. Essentially  the  same  state  of  things  has  contin- 
ued to  our  own  day.  The  high  duties  on  hemp,  which 
have  been  maintained  from  the  outset  to  the  present 
time,  have  never  succeeded  in  checking  a  large  and  con- 
tinuous importation.  The  facts  were  then,  and  are  now, 
very  similar  with  flax ;  yet  the  same  duty  of  $60  per  ton 
was  to  be  put  on  flax. 

On  wool  a  proposal  of  a  similar  kind  was  made.  The 
duty  under  the  tariff  of  1824  had  been  30  per  cent.  This 
was  to  be  changed  to  a  mixed  specific  and  ad  valorem 
duty,  the  first  mixed  duty  ever  enacted  in  the  United 
States.  Wool  was  to  pay  seven  cents  a  pound  (this  was 
reduced  to  four  cents  in  the  act  as  finally  passed),  and  in 
addition  40  per  cent,  in  1828,  45  per  cent,  in  1829,  and 
thereafter  50  per  cent.  The  object  of  the  mixed  duty 
was  to  make  sure  that  a  heavy  tax  should  be  put  on 
coarse  wool.  The  coarse  wool,  used  in  the  manufacture 
of  carpets  and  of  some  cheap  flannels  and  cloths,  was  not 
then  grown  in  the  United  States  to  any  extent,  and, 
indeed,  has  been  grown  at  no  time  in  this  country,  but 
has  always  been  imported,  mainly  from  Asia  Minor  and 
from  South  America.  Its  cost  at  the  place  of  exporta- 
tion was  in  1828  from  four  to  ten  cents  a  pound.1     The 

1  Gallatin,  "  Memorial,"  p.  67. 


92 


THE  EARLY  PROTECTIVE  MOVEMENT 


price  being  so  low,  a  simple  ad  valorem  duty  would  not 
have  affected  it  much.  But  the  additional  specific  duty 
of  seven  (four)  cents  weighted  it  heavily.  The  ad  valorem 
part  of  the  duty  reached  the  higher  grades  of  wool,  which 
were  raised  in  this  country  ;  it  was  calculated  to  please 
the  farmer.  The  specific  part  reached  the  lower  grades, 
which  were  not  raised  in  this  country,  and  was  calculated 
to  annoy  and  embarrass  the  manufacturers.  This  double 
object,  and  especially  the  second  half  of  it,  the  Jackson 
men  wanted  to  attain,  and  for  that  reason  the  policy  of 
admitting  the  cheap  wool  at  low  rates  was  set  aside, — a 
policy  which  has  been  followed  in  all  our  protective 
tariffs,  with  the  sole  exception  of  that  of  1828.1 

Another  characteristic  part  of  the  scheme  was  the 
handling  of  those  duties  on  woollens  that  corresponded 
to  the  duties  on  cheap  wool.  It  had  been  customary  to 
fix  low  duties  on  the  coarse  woollen  goods  made  from 
cheap  wool,  partly  because  of  the  low  duty  on  the  wool 

1  It  was  followed  in  1824,  1832,  1842,  and  again  in  the  wool  and  woollens 
act  of  1867,  on  which  the  existing  duties  [1887]  are  based.  The  rates  on 
wool  have  been  : 


1828 

1832 

1842 

1867 

General  duty  on  wool 

30  per  cent. 

4C 
plus  40 
per  cent. 

3C 

plus  30 
per  cent. 

IOC-I2C. 
plus  II 
per  cent. 

Duty  on  cheap  wool 

15  per  cent. 

on  wool 
under  10c. 

free, 

wool 

under  8c. 

5  per  cent, 
on  wool 
under  7c. 

3c 

on  wool 

under  12c. 

THE  EARLY  PROTECTIVE   MOVEMENT.  93 

itself,  and  partly  because  coarse  woollens  were  used  largely 
for  slaves  on  Southern  plantations.  Thus  in  1824  woollen 
goods  costing  less  than  33J  cents  a  yard  had  been  ad- 
mitted at  a  duty  of  25  per  cent.,  while  woollens  in  general 
paid  33^-  per  cent.  In  1828  this  low  duty  on  coarse 
woollens  was  continued,  although  the  wool  of  which  they 
were  made  was  subject  for  the  first  time  to  a  heavy  duty. 
The  object  again  was  to  embarrass  the  manufacturers,  and 
make  the  bill  unpalatable  to  the  protectionists  and  the 
Adams  men. 

The  same  object  appeared  in  the  duty  on  molasses, 
which  was  to  be  doubled,  going  from  five  to  ten  cents  a 
gallon.  A  spiteful  proviso  was  added  in  regard  to  the 
drawback  which  it  had  been  customary  to  allow  on  the 
exportation  of  rum  distilled  from  imported  molasses. 
The  bill  of  1828,  and  the  act  as  finally  passed,  expressly 
refused  all  drawbacks  on  rum  ;  the  intention  obviously 
being  to  irritate  the  New  Englanders.  The  animus  ap- 
peared again  in  the  heavy  duty  on  sail-duck,  and  the  re- 
fusal of  drawback  on  sail-duck  exported  by  vessels  in 
small  quantities  for  their  own  use.1 

In  the  duties  on  woollen  goods  the  changes  from  the 
schedule  proposed  by  the  Harrisburg  convention  were  on 
the  surface  not  very  great ;  but  in  reality  they  were  im- 
portant.    The  committee   gave    up    all   pretence    of   ad 

1  Sail-duck  was  charged  9  cents  a  yard,  with  an  increase  of  \  cent  yearly, 
until  the  duty  should  finally  be  \2\  cents.  This  was  equivalent  to  40  or  50 
per  cent.  In  1824  the  duty  had  been  15  per  cent.  Drawback  was  refused 
on  any  quantity  less  than  50  bolts  exported  in  one  vessel  at  one  time. 


94  THE  EARLY  PROTECTIVE   MOVEMENT. 

valorem  duties.  This  was  not  an  insignificant  circum- 
stance ;  for  the  ad  valorem  rate  of  the  minimum  system 
was  said  by  its  opponents  to  be  no  more  than  a  device 
for  disguising  the  heavy  duties  actually  levied  under  it. 
The  committee  brushed  aside  this  device,  and  made  the 
duties  on  woollens  specific  and  unambiguous.  On  goods 
costing  50  cents  a  square  yard  or  less,  the  duty  was  16 
cents;  on  goods  costing  between  50  cents  and  $1.00,  40 
cents;  on  those  costing  between  $1.00  and  $2.50,  $1.00; 
and  on  those  costing  between  $2.50  and  $4.00,  $1.60. 
Goods  costing  more  than  $4.00  were  to  pay  45  per  cent. 
These  specific  duties,  it  will  be  seen,  were  the  same  as  if  an 
ad  valorem  duty  of  40  per  cent,  had  been  assessed,  on  the 
minimum  principle,  on  valuations  of  50  cents,  $1.00, 
$2.50,  and  $4.00.  The  changes  from  the  Harrisburg  con- 
vention scheme  were,  therefore,  the  arrangement  of 
specific  duties  in  such  a  way  that  they  were  equivalent  to 
an  ad  valorem  rate  of  but  40  per  cent,  (the  convention  had 
asked  50  per  cent.)  ;  and,  next,  the  insertion  of  a  minimum 
point  of  $1.00,  the  Harrisburg  scheme  having  allowed  no 
break  between  40  cents  and  $2.50.  The  first  change 
might  have  been  submitted  to  by  the  protectionists  ;  but 
the  second  was  like  putting  a  knife  between  the  crevices 
of  their  armor.  We  have  already  noted  the  importance 
of  the  gap  between  the  minimum  points  of  40  cents  and 
$2.50.  A  very  large  part  of  the  imported  goods  were 
worth,  abroad,  in  the  neighborhood  of  $1.00;  and  the 
largest  branch  of  the  domestic  manufacture  made  goods 


THE  EARLY  PROTECTIVE  MOVEMENT.  95 

of  the  same  character  and  value.  The  original  scheme 
had  given  a  very  heavy  duty,  practically  a  prohibitory 
duty,  on  these  goods,  while  the  new  scheme  gave  a  com- 
paratively insignificant  duty  of  40  cents.  As  one  of  the 
protectionists  said  :  "  The  dollar  minimum  was  planted  in 
the  very  midst  of  the  woollen  trade."  ' 

The  bill,  in  fact,  was  ingeniously  framed  with  the  inten- 
tion of  circumventing  the  Adams  men,  especially  those 
from  New  England.  The  heavy  duties  on  iron,  hemp, 
flax  and  wool  were  bitter  pills  for  them.  The  new  dollar 
minimum  took  the  life  out  of  their  scheme  of  duties  on 
woollen  goods.  The  molasses  and  sail-duck  duties,  and 
the  refusal  of  drawbacks  on  rum  and  duck,  were  undis- 
guised blows  at  New  England.  At  the  same  time,  some 
of  these  very  features,  especially  the  hemp,  wool,  and  iron 
duties,  served  to  make  the  bill  popular  in  the  Western 
and  Middle  States,  and  made  opposition  to  it  awkward  for 
the  Adams  men.  The  whole  scheme  was  a  characteris- 
tic product  of  the  politicians  who  were  then  becoming 
prominent  as  the  leaders  of  the  Democracy,  men  of  a 
type  very  different  from  the  statesmen  of  the  preceding 
generation.  Clay  informs  us  that  it  was  one  of  the  many 
devices  that  had  their  origin  in  the  fertile  brain  of  Van 

1  "  Congressional  Debates,"  IV.,  2274.  See  the  statement  of  the  effect 
of  the  minimum  system  in  "  State  Papers,"  1827-28,  No.  143.  Davis  (of 
Massachusetts)  said  that  the  minimum  of  $1.00  "  falls  at  a  point  the  most 
favorable  that  could  be  fixed  for  the  British  manufacturer.  *  *  *  II 
falls  into  the  centre  of  the  great  body  of  American  business."  "  Congres- 
sional Debates,"  IV.,  1894,  1895.  See  to  the  same  effect  the  speech  of 
Silas  Wright,  Ibid.,  p.  1867. 


g6  THE   EARLY  PROTECTIVE   MOVEMENT. 

Buren.1  Calhoun  said  in  1837  that  the  compact  between 
the  Southern  members  and  the  Jackson  leaders  had  come 
about  mainly  through  Silas  Wright  ;  and  Wright  made 
no  denial.2 

The  result  of  this  curious  complication  of  wishes  and 
motives  was  seen  when  the  tariff  bill  was  finally  taken  up 
in  the  House  in  March.  Mallary,  as  chairman  of  the  com- 
mittee on  manufactures,  introduced  and  explained  the 
bill.  Being  an  Adams  man,  he  was  of  course  opposed  to 
it,  and  moved  to  amend  by  inserting  the  scheme  of  the 
Harrisburg  convention.  The  amendment  was  rejected 
by  decisive  votes,  102  to  75  in  committee  of  the  whole,3 
and  1 14  to  80  in  the  House.  The  majority  which  defeated 

1  "  I  have  heard,  without  vouching  for  the  fact,  that  it  [the  tariff  of  1828] 
was  so  framed  on  the  advice  of  a  prominent  citizen,  now  abroad  [Van  Bu- 
ren had  been  made  minister  to  England  in  1831],  with  the  view  of  ulti- 
mately defeating  the  bill,  and  with  assurances  that,  being  altogether  unac- 
ceptable to  the  friends  of  the  American  system,  the  bill  would  be  lost." 
Clay's  speech  of  February,  1832.     "  Works  "  II.,  13. 

*  See  Calhoun's  speech  of  1837,  as  cited  above,  p.  88.  In  the  debate  of 
1837,  Wright  admitted  the  compact  with  the  Southern  members,  but  said 
that  he  had  warned  them  that  the  New  England  men  in  the  end  might 
swallow  the  obnoxious  bill.  "  Congressional  Debates,"  XIII.,  922,  926-927. 
Wright  was  a  member  of  the  committee  on  manufactures,  was  the  spokes- 
man of  the  Jackson  men  who  formed  the  majority  of  its  members,  and  had 
charge  of  the  measure  before  the  House.  Jenkins,  "  Life  of  Wright," 
pp.  53-60. 

The  Adams  men  saw  through  the  scheme  at  the  time.  Clay  wrote  to  J. 
J.  Crittenden,  in  February,  even  before  the  House  began  the  discussion  of 
the  bill  :  "  The  Jackson  party  are  playing  a  game  of  brag  on  the  subject  of 
the  tariff.  They  do  not  really  desire  the  success  of  their  own  measure  ; 
and  it  may  happen  in  the  sequel  that  what  is  desired  by  neither  party  will 
command  the  votes  of  both."     "  Life  of  Crittenden,"  I.,  67. 

3  "  Congressional  Debates,"  IV.,  2038. 


THE  EARLY  PROTECTIVE   MOVEMENT.  97 

the  amendment  was  composed  of  all  the  Southern  mem- 
bers, and  of  the  Jackson  members  from  the  North,  chiefly 
from  New  York,  Pennsylvania,  Ohio,  and  Kentucky.  The 
minority  consisted  almost  exclusively  of  friends  of  the 
administration.1  Mallary  then  moved  to  substitute  that 
part  only  of  the  Harrisburg  convention  scheme  which 
fixed  the  duties  on  wool  and  woollens  ;  that  is,  the  original 
minimum  scheme,  with  a  uniform  duty  of  forty  per  cent, 
on  wool.  This  too  was  rejected,  but  by  a  narrow  vote, 
98  to  97.2  The  Jackson  men  permitted  only  one  change 
of  any  moment :  they  reduced  the  specific  duty  on  raw 
wool  from  seven  cents,  the  point  fixed  by  the  committee, 
to  four  cents,  the  ad  valorem  rate  remaining  at  40  per 
cent.3  The  duty  on  molasses  was  retained,  by  the  same 
combination  that  refused  to  accept  the  Harrisburg 
scheme.4  The  Southern  members  openly  said  that  they 
meant  to  make  the  tariff  so  bitter  a  pill  that  no  New  Eng- 
land member  would  be  able  to  swallow  it.5 

1  See  Niles,  XXXV.,  57,  where  the  various  votes  on  the  bill  are  ana- 
nalyzed.     The  vote  on  Mallary's  amendment  was  : 

Yeas     ...     78  Adams  men,      2  Jackson  men      ...       80 
Nays     ...     14       "  "     100         "  "...     114 

2  "  Congressional  Debates,"  IV.,  2050. 

3  The  Adams  men  seem  to  have  opposed  this  reduction.   The  vote  was  : 

Yeas     ...      10  Adams  men,  go  Jackson  men      .     .     .     100 
Nays    ...     79       "  "20         "  "        ...       99 

4  On  reducing  the  molasses  duty,  the  vote  was  : 

Yeas     ...     72  Adams  men,  10  Jackson  men      ...       82 
Nays    ...     19       "  "95         "  "        ...      114 

5  Most  of  the  Southern  members  kept  silence  during  the  debates  on  the 
details  of  the  bill.  After  its  third  reading,  McDuffie  and  others  made  long 
speeches  against  it.     One  of  the  South  Carolina  Congressmen,  however, 


98  THE   EARLY  PROTECTIVE   MOVEMENT. 

When  the  final  vote  on  the  bill  came,  the  groups  of 
members  split  up  in  the  way  expected  by  the  Democrats. 
The  Southern  members,  practically  without  exception, 
voted  against  it.  Those  from  the  Middle  and  Western 
States  voted  almost  unanimously  for  it.  The  Jackson 
men  voted  for  their  own  measure  for  consistency's  sake  ; 
the  Adams  men  from  these  States  joined  them,  partly  for 
political  reasons,  mainly  because  the  bill,  even  with  the 
obnoxious  provisions,  was  acceptable  to  their  constitu- 
ents. Of  the' New  England  members,  a  majority,  23  out 
of  39,  voted  in  the  negative.  The  affirmative  votes  from 
New  England,  however,  were  sufficient,  when  added 
to  those  from  the  West  and  the  Middle  States,  to  en- 
sure its  passage.  The  bill  accordingly  passed  the 
House.1 

This  result  had  not  been  entirely  unexpected.  The 
real  struggle,  it  was  felt,  would  come  in  the  Senate,  where 
the  South  and  New  England  had  a  proportionately  large 
representation.  In  previous  years  the  Senate  had  main- 
tained, in  its  action  on  the  tariff  bills  of   1820  and  1824,  a 

said  frankly  :  "  He  should  vote  for  retaining  the  duty  on  molasses,  because 
he  believed  that  keeping  it  in  the  bill  would  get  votes  against  its  final  pas- 
sage" "Congressional  Debates,"  IV.,  2349.  The  Jackson  free-traders 
from  the  North  (there  were  a  few  such)  followed  the  same  policy.  See 
Cambreleng's  remarks,  ibid.,  3326.  See  also  the  passage  quoted  in  Niles, 
XXXV.,  52. 

1  The  vote  was  : 

Yeas     ....     61  Adams  men,  44  Jackson  men     .     .     .      105 
Nays    ....     35       "  "      59  "...       94 

If  six  of  those  New  England  members  who  voted  yea,  had  voted  nay, 
the  bill  would  have  failed.     Niles,  loc.  cit. 


THE  EARLY  PROTECTIVE   MOVEMENT.  99 

much  more  conservative  position  than  the  House.1  But 
in  1828  the  course  of  events  in  the  Senate  was  in  the  main 
similar  to  that  in  the  House.  The  bill  was  referred  to 
the  committee  on  manufactures,  and  was  returned  with 
amendments,  of  which  the  most  important  referred  to  the 
duty  on  molasses  and  to  the  duties  on  woollen  goods. 
The  duty  on  molasses  was  to  be  reduced  from  10  cents, 
the  rate  fixed  by  the  House,  to  *]\  cents.  The  duties  on 
woollen  goods,  in  the  bill  as  passed  by  the  House,  had 
been  made  specific,  equivalent  to  40  per  cent,  on  minimum 
valuations  of  50  cents,  $1.00,  $2.50,  and  $4.00.  The  Sen- 
ate committee's  amendment  made  the  duties  ad  valorem 
in  form,  to  be  assessed  on  the  minimum  valuation  just 
mentioned.  The  rate  was  to  be  40  per  cent,  for  the  first 
year  ;  thereafter,  45  per  cent.2 

1  The  tariff  of  1824  was  much  changed  in  the  Senate  from  the  shape  in 
which  it  had  been  passed  by  the  House.      "  Annals  of  Congress,"  1823-24, 

PP.  723-735- 

>2  It  was  expected  that  this  change  to  ad  valorem  duties  would  have  still 
another  effect.  According  to  the  method  then  in  use  for  assessing  ad  valo- 
rem duties,  the  dutiable  value  of  goods  imported  from  Europe  was  ascer- 
tained by  adding  10  per  cent,  to  the  cost  or  invoice  value.  See  the  act  of 
1828,  "  Statutes  at  Large,"  IV.,  274,  substantially  re-enacting  the  provi- 
sions of  the  revenue-collection  act  of  1789,  "  Statutes  at  Large,"  I.,  141. 
It  was  expected  that  by  the  force  of  this  provision  the  effect  of  the  ad  valo- 
rem rate,  under  the  Senate  amendment,  would  be  to  increase  the  duty  not 
merely  to  45  per  cent.,  but  to  49^  per  cent.  Hence  Webster,  in  his  speech 
on  the  bill,  spoke  of  the  amendment  as  carrying  the  duty  "  up  to  45  or  per- 
haps 50  per  cent,  ad  valorem."  "  Works,"  III.,  231.  But  the  Secretary  of 
the  Treasury,  Rush,  finally  decided,  very  properly,  that  the  provision  did 
not  apply  to  duties  assessed  on  minimum  valuations,  thereby  causing  much 
dissatisfaction  among  the  protectionists.  See  "  Congressional  Debates," 
VI.,  3o~. 


IOO  THE  EARLY  PROTECTIVE  MOVEMENT. 

Other  amendments  were  proposed,  all  tending  to  make 
the  bill  less  objectionable  to  the  New  England  Senators. 
Most  of  them  were  rejected.  The  proposed  reduction  on 
molasses  was  rejected  by  the  same  combination  that  had 
prevented  the  reduction  from  being  made  in  the  House. 
The  Southern  Senators,  and  those  from  the  North  who 
supported  Jackson,  united  to  retain  the  duty  of  10  cents. 
When  Webster  moved  to  reduce  the  duty  on  hemp,  only 
the  New  England  Senators  voted  with  him.  Again,  an 
attempt  was  made  to  increase  the  duty  on  coarse  wool- 
lens, on  which,  it  will  be  remembered,  the  House  had  put 
a  low  rate,  notwithstanding  the  heavy  duty  on  coarse 
wool.  The  Senate,  by  a  strict  party  vote,  retained  the 
duty  as  the  House  had  fixed  it.  One  of  the  amendments, 
however,  was  carried — that  which  changed  the  duties  on 
woollens  to  an  ad  valorem  rate  of  45  per  cent.  Two 
Democratic  Senators,  Van  Buren  and  Woodbury,  who 
had  voted  with  the  South  against  other  amendments, 
voted  in  favor  of  this  one.  It  was  carried  by  a  vote  of 
24  to  22,  while  all  others  had  been  rejected  by  a  vote  of 
22  to  24.1 

With  this  amendment,  the  bill  was  finally  passed  by 
the  Senate,  the  vote  being  26  to  21.  The  Southern  Sena- 
tors (except  two  from  Kentucky,  and  one  each  from  Ten- 
nessee and  Louisiana)  voted  against  it.  Those  from  the 
Middle  and  Western  States  all  voted  for  it.  Trios'*  from 
New  England  split ;  six  voted  yea,  five  nay.     The  result 

1  The  votes  in  the  Senate  are  given  in  Niles,  XXXIV.,  178,  179,  196. 


THE  EARLY  PROTECTIVE  MOVEMENT.  IOI 

seems  to  have  depended  largely  on  Webster.  His  col- 
league Silsbee  voted  nay,  and  Webster  himself  had  been 
in  doubt  a  week  before  the  final  vote.1  Finally  he  swal- 
lowed the  bill ;  and  he  carried  with  him  enough  of  the 
New  England  Senators  to  ensure  its  passage. 

Webster  defended  his  course  to  his  constituents  on  the 
ground  that  the  woollens  amendment  (fixing  the  45  per 
cent,  ad  valorem  rate)  had  made  the  bill  much  more  favor- 
able to  the  manufacturers.  He  said  he  should  not  have 
voted  for  it  in  the  shape  in  which  the  House  passed  it.2 
Calhoun  made  the  same  statement  in  1837,  m  the  speech 
to  which  reference  has  already  been  made.3  No  doubt 
the  slight  change  on  woollens  mollified  in  some  degree 
the  New  England  men  ;  but  after  all,  political  motives,  or, 
as  Webster  put  it,  "  other  paramount  considerations," 
caused  them  to  swallow  the  bill.  They  were  afraid  to 
reject  it,  for  fear  of  the  effect  in  the  approaching  campaign 
and  election.4 

1  "  Memoirs  of  J.  Q.  Adams,"  VII.,  530,  534. 

2  In  a  speech  made  a  month  later  ;  printed  in  his  "  Works,"  I.,  165.  In 
the  House,  the  representative  from  Boston  had  voted  against  the  bill,  and 
Webster  commended  his  action.  In  his  Senate  speech  Webster  had  said 
that,  even  at  the  45  per  cent,  rate,  the  duty  on  woollens  was  barely  suffi- 
cient to  compensate  for  the  duty  on  wool.     "  Works,"  III.,  241. 

3<<  Works,"  III.,  50,  51.  Calhoun  even  accused  Van  Buren  of  being  the 
"real  author"  of  the  tariff  of  1828.  He  said  that,  but  for  Van  Buren's 
vote  in  favor  of  the  woollens  amendment,  there  would  have  been  a  tie  on 
the  amendment  ;  his  own  casting  vote  as  Vice-President  would  have  de- 
feated it  ;  the  bill,  without  the  amendment,  would  have  been  rejected  by 
Webster  and  the  other  New  England  Senators.  Therefore,  Van  Buren 
was  responsible   for  its  having  been  passed. 

4  After  the  final  vote  in  the  House,  John  Randolph  said ;  "  The  bill  re- 


102  THE  EARLY  PROTECTIVE  MOVEMENT. 

The  act  of  1828  had  thus  been  passed  in  a  form  ap- 
proved by  no  one.  It  was  hardly  to  be  expected  that  a 
measure  of  this  kind  should  long  remain  on  the  statute- 
book,  and  it  was  superseded  by  the  act  of  1832.  During 
the  intervening  four  years  several  causes  combined  to  lead 
to  more  moderate  application  of  the  protective  principle. 
The  protective  feeling  diminished.  Public  opinion  in  the 
North  had  been  wellnigh  unanimous  in  favor  of  protec- 
tion between  1824  and  1828;  but  after  1828,  although 
there  was  still  a  large  preponderance  for  protection, ' 
there  was  a  strong  and  active  minority  against  it.  The 
tariff  question  ceased  to  be  an  important  factor  in  politics, 
so  that  this  obstacle  to  its  straightforward  treatment  was 
removed.     And,  finally,  there  was  a  strong  desire  to  make 

ferred  to  manufactures  of  no  sort  or  kind,  except  the  manufacture  of  a 
President  of  the  United  States."  In  1833,  Root,  a  representative  from 
New  York,  said  :  "  The  act  of  1828  he  had  heard  called  the  bill  of  Abom- 
inations. ...  It  certainly  grew  out  of  causes  connected  with  President- 
making.  It  was  fastened  on  the  country  in  the  scuffle  to  continue  the  then 
incumbent  in  office,  on  one  side,  and  on  the  other  to  oust  him  and  put  an- 
other in  his  stead.  .  .  .  The  public  weal  was  disregarded,  and  the  only 
question  was :  Shall  we  put  A  or  B  in  the  presidential  chair  ?  When  it 
was  thought  necessary  to  secure  a  certain  State  in  favor  of  the  then  incum- 
bent, a  convention  was  called  at  Harrisburg  to  buy  them  over.  [See,  how- 
ever, the  note  to  p.  84,  above.]  On  the  other  side  another  convention  was 
called,  who  mounted  the  same  hobby.  The  price  offered  was  the  same  on 
both  sides  :  a  high  tariff.  One  candidate  was  thought  to  be  a  favorite, 
because  he  was  supposed  to  be  a  warm  friend  of  the  protective  system,  and 
would  support  a  high  tariff  ;  but  they  were  told,  on  the  other  side,  that  their 
candidate  would  go  for  as  high  a  tariff."  "  Congressional  Debates,"  IX., 
1 104,  1 105. 

1  As  Gallatin  admits:  "It  is  certain  that  at  this  time  (1832)  the  tariff 
system  is  supported  by  a  majority  of  the  people  and  of  both  Houses  of 
Congress."     "  Works,"  II.,  455. 


THE  EARLY  PROTECTIVE  MOVEMENT.  IO3 

some  concession  to  the  growing  opposition  of  the  South. 
It  is  true  that  in  1832  Clay  and  the  more  extreme  protec- 
tionists wished  to  retain  the  act  of  1828  intact,  and  to 
effect  reductions  in  the  revenue  by  lowering  the  non-pro- 
tective duties  only.1  But  most  of  the  protectionists,  led 
by  Adams,  took  a  more  moderate  course,  and  consented 
to  the  removal  of  the  abominations  of  1828. 

Even  before  1832  some  changes  were  made.  In  1830 
the  molasses  abomination  was  got  rid  of.  The  duty  on 
molasses  was  reduced  from  ten  cents  a  gallon  to  five  cents, 
the  rate  imposed  before  1828,  and  the  drawback  on  ex- 
portation of  rum  was  restored.2  At  the  same  time  the 
duties  on  tea,  coffee,  and  cocoa  were  lowered,  as  one 
means  of  reducing  the  revenue.3 

The  most  important  step  taken  in  1832  was  the  entire 
abolition  of  the  minimum  system.  Woollen  goods  were 
subjected  to  a  simple  ad  valorem  duty  of  50  per  cent. 
The  minimum  system,  as  arranged  in  the  act  of  1828, 
had  been  found  to  work  badly.  The  manufacturers  said 
it  had  been  positively  injurious  to  them.4  As  might  have 
been  expected,  it  led  to  attempts  at  evasion  of  duties, 
to  undervaluation,  and  to  constant  disputes  at  the  cus- 

1  "Works,"  I.,  586-595. 

*  "  Statutes  at  Large,"  IV.,  419.  The  act  seems  to  have  passed  without 
debate  or  opposition. 

3  Ibid.,  p.  403. 

4  Browne,  of  Boston,  a  manufacturer  who  had  actively  supported  the 
minimum  system,  declared:  "I  could  manufacture  to  better  advantage 
under  the  tariff  of  1816  than  under  that  of  1828  ;  for  the  duty  on  wool  was 
then  lower,  and  that  on  cloths  a  better  protection."     Niles,  XLI.,  204. 


104  THE  EARLY  PROTECTIVE  MOVEMENT. 

tom-houses.  The  troubles  arose  mainly  under  the  dollar 
minimum.  Goods  worth  $1.25  or  $1.50  were  invoiced  so 
as  to  bring  their  values  below  $1.00,  in  order  to  escape 
the  duty  under  the  next  minimum  point,  $2.50.  The 
difficulties  were  ascribed  to  the  depravity  of  foreign  ex- 
porting houses  and  to  the  laxity  of  the  revenue  laws, 
and  in  1830  a  special  act  in  regard  to  goods  made  of  cot- 
ton or  wool  was  passed,  making  more  stringent  the  pro- 
visions for  collecting  duties.  But  the  troubles  continued 
nevertheless,1  and,  in  truth,  they  were  inevitable  under 
a  system  which  imposed  specific  duties  graded  accord- 
ing to  the  value  of  the  goods.  Similar  duties  exist 
in  the  present  tariff  (1887)  on  some  classes  of  wool  and 
woollens,  and  lead  to  the  same  unceasing  complaints  of 
dishonesty  and  fraud,  and  the  same  efforts  to  make  the 
law  effective  by  close  inspection  and  severer  penalties. 
In  1832,  the  protectionists  themselves  swept  away  the 
minimum  system.  The  ad  valorem  duty  of  50  per  cent, 
which  was  put  in  its  place  was  left  to  be  not  without  its 

1  "  Statutes  at  Large,"  IV.,  400.  See  the  speeches  of  Mallary,  "  Congres- 
sional Debates,"  VI.,  795-803,  and  of  Davis,  ibid.,  p.  874,  for  instances  and 
proofs  of  the  frauds.  The  act  provided  for  forfeiture  of  goods  fraudulently 
undervalued  ;  but  no  verdicts  under  it  could  be  obtained.  At  the  protec- 
tionist convention  held  in  New  York  in  1831,  one  of  the  speakers  said: 
' '  The  same  mistaken  current  of  opinion  which  prevailed  on  'change,  en- 
tered and  influenced  the  jury-box.  Men  thought  the  law  rigorous  and 
severe.  They  considered  it  hard  that  a  man  should  forfeit  a  large  amount 
of  property  for  a  mere  attempt  to  evade  an  enormous  duty.  In  two  years 
there  was  but  a  single  case  pursued  into  a  court  of  justice."  Niles,  XLI., 
203.  See  also  the  Report  on  Revenue  Frauds,  made  by  a  committee  of 
this  same  convention,  in  Niles,  XLI.,  Appendix,  p.  33. 


THE   EARLY  PROTECTIVE  MOVEMENT.  10$ 

dangers  in  the  matter  of  fraud  and  under-valuation,  but  it 
was  harmless  as  compared  with  the  minimum  system  of 
1828.1 

The  other  "  abominations "  of  the  act  of  1828  were 
also  done  away  with  in  1832.  The  duty  on  hemp,  which 
had  been  $60  a  ton  in  1828,  was  reduced  to  a  duty  of  $40. 
Flax,  which  had  also  been  subjected  to  a  duty  of  $60  a 
ton  in  1828,  was  put  on  the  free  list.  The  duties  on  pig- 
and  bar-iron  were  put  back  to  the  rates  of  1824.  The 
duty  on  wool  alone  remained  substantially  as  it  had  been 
in  1828,  being  left  as  a  compound  duty  of  4  cents  a  pound 
and  40  per  cent.  But  even  here  the  special  abomination 
of  1828  was  removed;  cheap  wool,  costing  less  than 
8  cents  a  pound,  was  admitted  free  of  duty.  In  fact,  the 
protective  system  was  put  back,  in  the  main,  to  where  it 
had  been  in  1824.  The  result  was  to  clear  the  tariff  of 
the  excrescences  which  had  grown  on  it  in  1828,  and  to 
put  it  in  a  form  in  which  the  protectionists  could  advo- 
cate its  permanent  retention. 

Even  in  this  modified  form,  however,  the  system  could 
not  stand  against  the  attacks  of  the  South.  In  the  fol- 
lowing year,  1833,  the  compromise  tariff  was  passed.  It 
provided  for  a  gradual  and  steady  reduction  of  duties. 
That  reduction  took  place;  and  in  July,  1842,  a  general 

1  J.  Q.  Adams,  who  was  most  active  in  framing  the  act  of  1832,  tried  to 
embody  the  '-  home  valuation"  principle  into  it ;  but  in  vain.  "  Congres- 
sional Debates,"  VIII.,  3658,  3671.  He  also  tried  to  give  the  government 
an  option  to  take  goods  on  its  own  account  at  a  slight  advance  over  the 
declared  value  ;  but  this  plan  also  was  rejected.     Ibid.,  p.  3779. 


106  THE  EARLY  PROTECTIVE  MOVEMENT. 

level  of  20  per  cent,  was  reached.  Two  months  later,  in 
September,  1842,  a  new  tariff  act,  again  of  distinctly  pro- 
tective character,  went  into  effect.  But  this  act  belongs 
to  a  different  period,  and  has  a  different  character  from 
the  acts  of  1824,  1828,  and  1832.  The  early  protective 
movement,  which  began  in  1 8 19,  and  was  the  cause  of 
the  legislation  of  the  following  decade,  lost  its  vigor  after 
1832.  Strong  popular  sentiment  in  favor  of  protection 
wellnigh  disappeared,  and  the  revival  of  protection  in 
1842  was  due  to  causes  different  from  those  that  brought 
about  the  earlier  acts.  The  change  in  popular  feeling  is 
readily  explained.  The  primary  object  of  the  protective 
legislation  of  the  earlier  period  had  been  attained  in 
1842.  The  movement  was,  after  all,  only  an  effort,  half 
conscious  of  its  aim,  to  make  more  easy  the  transition  from 
the  state  of  simple  agriculture  and  commerce  which  pre- 
vailed before  the  war  of  1 812,  to  the  more  diversified  condi- 
tion which  the  operation  of  economic  forces  was  reason- 
ably certain  to  bring  about  after  181 5.  The  period  of  tran- 
sition was  passed,  certainly  by  1830,  probably  earlier.  At 
all  events,  very  soon  after  1820  it  was  felt  that  there  was 
not  the  same  occasion  as  in  previous  years  for  measures 
to  tide  it  over,  and  a  decline  in  the  protective  feeling 
was  the  natural  consequence. 

Not  the  least  curious  part  of  the  history  of  the  act  of 
1828  is  the  treatment  it  has  received  from  the  protec- 
tionist writers.  At  the  time,  the  protectionists  were  far 
from  enthusiastic  about  it.     Niles  could  not  admit  it  to 


THE  EARLY  PROTECTIVE  MOVEMENT.  1 07 

be  a  fair  application  of  the  protective  policy,1  while  Mat- 
thew Carey  called  it  a  "  crude  mass  of  imperfection,"  and 
admitted  it  to  be  a  disappointment  to  the  protectionists.2 
In  later  years,  however,  when  the  details  of  history  had 
been  forgotten,  it  came  to  be  regarded  with  more  favor. 
The  duties  being  on  their  face  higher  than  those  of  pre- 
vious years,  it  was  considered  a  better  application  of  pro- 
tective principles.  Henry  C.  Carey,  on  whose  authority 
rest  many  of  the  accounts  of  our  economic  history,  called 
it  "  an  admirable  tariff."3  He  represented  it  as  having 
had  great  effect  on  the  prosperity  of  the  country,  and  his 
statements  have  often  been  repeated  by  protectionist 
writers. 

It  is  almost  impossible  to  trace  the  economic  effect  of 
any  legislative  measure  that  remains  in  force  no  more 
than  four  years  ;  and  certainly  we  have  not  the  materials 
for  ascertaining  the  economic  effects  of  the  act  of  1828. 
Taken  by  itself,  that  act  is  but  a  stray  episode  in  our  po- 
litical history.  It  illustrates  the  change  in  the  character  of 
our  public  men  and  our  public  life  which  took  place  during 
the  Jacksonian  time.  As  an  economic  measure,  it  must 
be   considered,   not   by  itself,   but  as  one  of  a  series  of 

»Niles,  XXXVII.,  81  ;  XXXVI.,  113,  and  elsewhere.  Niles  objected 
especially  to  the  $1.00  minimum  on  woollens. 

2  See  his  "  Common-Sense  Address  "  (1829),  p.  XI. ;  "  The  Olive  Branch,'' 
No.  III.,  p.  54;  No.  IV.,  p.  3  (1832). 

3  See  his  "  Review  of  the  Report  of  D.  A.  Wells  "  (1869),  p.  4  ;  and  to 
the  same  effect,  "Harmony  of  Interests,"  p.  5,  and  "Social  Science," 
II.,  225. 


108  THE  EARLY  PROTECTIVE  MOVEMENT. 

measures,  begun  tentatively  in  1816,  and  carried  out  more 
vigorously  in  1824,  1828,  and  1832,  by  which  a  protective 
policy  was  maintained  for  some  twenty  years.  It  is  very 
doubtful  whether,  with  the  defective  information  at  our 
disposal,  we  can  learn  much  as  to  the  effect  on  the  pros- 
perity  of  the  country  even  of  the  whole  series  of  tariff  acts. 
Probably  we  can  reach  conclusions  of  any  value  only  on 
certain  limited  topics,  such  as  the  effects  of  protection  to 
young  industries  during  this  time  ;  as  to  the  general  effect 
of  the  protective  measures  we  must  rely  on  deduction 
from  general  principles.  At  all  events,  no  one  can  trace 
the  economic  effects  of  the  act  of  1828.  To  ascribe  to  it 
the  supposed  prosperity  of  the  years  in  which  it  was  in 
in  force,  as  Henry  C.  Carey  and  his  followers  have  done, 
is  only  a  part  of  that  exaggeration  of  the  effect  of  pro- 
tective duties  which  is  as  common  among  their  opponents 
as  among  their  advocates. 


THE  TARIFF,  1830-1860. 


In  the  years  between  1832  and  i860  there  was  great 
vacillation  in  the  tariff  policy  of  the  United  States ;  there 
were  also  great  fluctuations  in  the  course  of  trade  and  in- 
dustry. A  low  tariff  was  succeeded  by  a  high  tariff,  which 
was  in  turn  succeeded  by  another  low  tariff.  Periods  of 
undue  inflation  and  of  great  demoralization,  of  prosperity 
and  of  depression,  followed  each  other.  The  changes  in 
the  rates  of  duty  and  the  fluctuations  in  industrial  history 
have  often  been  thought  to  be  closely  connected.  Protec- 
tionists have  ascribed  prosperity  to  high  tariffs,  depression 
to  low  tariffs  ;  free  traders  have  reversed  the  inference. 
It  is  the  object  of  the  present  essay  to  trace,  so  far  as 
this  can  be  done,  the  economic  effect  of  tariff  legislation 
during  the  thirty  years  of  varying  fortune  that  preceded 
the  civil  war. 

First,  by  way  of  introduction,  a  sketch  must  be  given 
of  the  history  of  the  tariff.  We  i>egin  with  the  tariff  act 
of  1832,  a  distinctly  protectionist  measure,  passed  by  the 
Whigs,  or  National  Republicans,  which  put  the  protective 
system  in  a  shape  such  as  the  advocates  of  protection 
hoped  it  might  retain  permanently.    It  levied  high  duties 

109 


IIO  THE    TARIFF,    183O-1860. 

on  cotton  and  woollen  goods,  iron,  and  other  articles 
to  which  protection  was  meant  to  be  applied.  On  arti- 
cles not  produced  in  the  United  States,  either  low  duties 
were  imposed,  as  on  silks,  or  no  duties  at  all,  as  on  tea  and 
coffee.  The  average  rate  on  dutiable  articles  was  about  33 
per  cent. 

In  1833,  the  Compromise  Tariff  Act  was  passed,  and 
remained  in  force  until  1842.  That  act,  there  can  be 
little  doubt,  was  the  result  of  an  agreement  between  Clay 
and  Calhoun,  the  leaders  of  the  protectionists  and  free 
traders,  while  it  secured  also  the  support  of  the  Jackson 
administration.  Clay  had  been  hitherto  the  most  uncom- 
promising of  the  protectionists ;  Calhoun  had  represented 
the  extreme  Southern  demand  that  duties  should  be  re- 
duced to  a  horizontal  level  of  15  or  20  per  cent.1  The 
compromise  provided  for  the  retention  of  a  considerable 
degree  of  protection  for  nearly  nine  years,  and  thereafter 
for  a  rapid  reduction  to  a  uniform  20  per  cent.  rate.  The 
tariff  of  1832  was  the  starting-point.  All  duties  which 
in  that  tariff  exceeded  20  per  cent,  were  to  have  one  tenth 
of  the  excess  over  20  per  cent,  taken  off  on  January  1, 
1834;  one  tenth  more  on  January  1,  1836;  again  one 
tenth  in  1838;  and  another  in  1840.  That  is,  by  1840, 
four  tenths  of  the  excess  over  20  per  cent,  would  be  gone. 


1  The  Nullifiers  had  said  that  such  a  horizontal  rate  was  the  least  they 
were  willing  to  accept.  See  the  Address  to  the  People  of  the  United  States 
by  the  South  Carolina  Convention,  in  the  volume  of  "  State  Papers  on  Nul- 
lification;" published  by  the  State  of  Massachusetts,  p.  69. 


THE    TARIFF,    1830-1860.  Ill 

Then,  on  January  1,  1842,  one  half  the  remaining  excess 
was  to  be  taken  off;  and  on  July  I,  1842,  the  other  half 
of  the  remaining  excess  was  to  go.  After  July  1,  1842, 
therefore,  there  would  be  a  uniform  rate  of  20  per  cent, 
on  all  articles.  Obviously,  the  reduction  was  very  gradual 
from  1833  till  1842,  while  in  the  first  six  months  of  1842 
a  sharp  and  sudden  reduction  was  to  take  place. 

Considered  as  a  political  measure,  the  act  of  1833  mav 
deserve  commendation.  As  an  economic  or  financial 
measure,  there  is  little  to  be  said  for  it.  It  was  badly 
drafted.  No  provision  was  made  in  it  as  to  specific 
duties ;  yet  it  was  obviously  meant  to  apply  to  such 
duties,  and  the  Secretary  of  the  Treasury  had  to  take  it 
on  himself  to  frame  rules  as  to  the  manner  of  ascertaining 
the  ad  valorem  equivalents  of  specific  duties  and  making 
the  reductions  called  for  by  the  act.1  Again,  the  reduc- 
tions of  duty  were  irregular.  Thus  on  one  important 
article,  rolled  bar-iron,  the  duty  of  1832  had  been  specific, 
— $1.50  per  hundredweight.  This  was  equivalent,  at  the 
prices  of  1832,  to  about  95  per  cent.  The  progress  of  the 
reductions  is  shown  in  the  note.2     Up  to  1842,  they  were 

1  The  instructions  issued  from  the  Treasury  Department  may  be  found 
in  "  Exec.  Doc."  1833-34,  v°l-  !•»  No.  43.     It  has  been  thought  that  the 
act  did  not  apply  to  specific  duties  ;  but  this  is  a  mistake. 
2  Year.  Duty,  per  cent. 

1834  87 

1836  80 

1838  72.5 

1840  65 

Jan.  1,   1842  42.5 

July  5,   1842  20 

This  calculation  is  on  the  basis  of  the  prices  of  1833.     If  prices  changed 


112  THE    TARIFF,    183O-1860. 

comparatively  moderate  ;  but  in  the  six  months  from  Jan- 
uary 1  to  July  1,  1842,  the  duty  dropped  from  65  to  20 
per  cent.  Producers  and  dealers  necessarily  found  it 
hard  to  deal  with  such  changes.  It  is  true  that  a  long 
warning  was  given  them  ;  but,  on  the  other  hand,  Con- 
gress might  at  any  moment  interfere  to  modify  the  act. 
Finally,  and  not  least  among  the  objections,  there  was  the 
ultimate  horizontal  rate  of  20  per  cent. — a  crude  and 
indiscriminating  method  of  dealing  with  the  tariff  prob- 
lem, which  can  be  defended  on  no  ground  of  principle  or 
expediency.  The  20  per  cent,  rate,  according  to  the 
terms  of  the  act,  was  to  remain  in  force  indefinitely,  that 
being  the  concession  which  in  the  end  was  made  to  the 
extremists  of  the  South.1 

As  it  happened,  however,  the  20  per  cent,  duty  remained 
in  force  for  but  two  months,  from  July  1  till  September 
1,  1842.2     At  the  latter  date  the  tariff  act  of  1842  went 

(and  they  did  change  greatly),  the  rates  under  the  Compromise  Act  would 
vary  materially  from  those  given  in  the  text  ;  since  the  ad  valorem  equiva- 
lent of  the  specific  duty,  and  its  excess  over  20  per  cent.,  were  ascertained 
for  each  year  according  to  the  prices  of  that  year. 

1  Clay,  who  drafted  the  act,  probably  had  no  expectation  that  the  20  per 
cent,  rate  ever  would  go  into  effect.  He  thought  Congress  would  amend 
before  1842,  and  intended  to  meet  by  his  compromise  the  immediate  emer- 
gency only.  See  his  "Works,"  vol.  II.,  pp.  131,  132.  He  tried  to  show 
Appleton  and  Davis,  two  leading  representatives  of  the  protectionists,  that 
"  no  future  Congress  would  be  bound  by  the  act."  See  Appleton's  speech 
on  the  Tariff  Act  of  1842,  "  Appendix  to  Cong.  Globe,"  1841-42,  p.  575. 

2  The  Compromise  Act  was  so  loosely  constructed  that  doubt  was  enter- 
tained whether  under  its  terms  any  duties  at  all  could  be  collected  after 
June  30,  1842.  The  point  was  carried  before  the  Supreme  Court,  which 
decided,  however,  that  the  rate  of  20  per  cent,  was  in  effect  during  the  two 


THE    TARIFF,    183O-1860.  II3 

into  force.  That  act  was  passed  by  the  Whigs  as  a  party 
measure,  and  its  history  is  closely  connected  with  the 
political  complications  of  the  time.  The  Whigs  had 
broken  with  President  Tyler,  and  had  a  special  quarrel 
with  him  as  to  the  distribution  among  the  States  of  the 
proceeds  of  the  public  lands.  Tyler  vetoed  two  successive 
tariff  bills  because  of  clauses  in  them  in  regard  to  distri- 
bution. The  bill  which  he  finally  signed,  and  which 
became  law,  was  passed  hurriedly,  without  the  distribution 
clause.  Attention  was  turned  mainly  to  the  political  quar- 
rel and  to  the  political  effect  of  the  bill  in  general.1  The 
act,  naturally  enough,  was  a  hasty  and  imperfect  measure, 
of  which  the  details  had  received  little  consideration. 
The  duties  which  it  levied  were  high, — probably  higher 
than  they  would  have  been  had  the  tariff  discussion  been 
less  affected  by  the  breach  between  Tyler  and  the  Whigs. 
Though  distinctively  protective,  and  proclaimed  to  be 
such  by  the  Whigs,  it  had  not  such  a  strong  popular 
feeling  behind  it  as  had  existed  in  favor  of  the  protective 
measures  of  1824,  1828,  and  1832.  In  the  farming  States 
the  enthusiasm  for  the  home-market  idea  had  cooled  per- 
ceptibly ;  and  in  the  manufacturing  States  the  agitation 
came  rather  from  the  producers  directly  interested  than 

months  before  the  act  of  1842  went  in  force.  (Aldridge  vs.  Williams,  3 
Howard,  9.)  Justice  McLean  dissented  ;  and  there  is  much  force  to  his 
dissenting  opinion  and  to  the  argument  of  Reverdy  Johnson,  the  counsel 
against  the  government. 

1  A  full  account  of  this  struggle  is  in  Von  Hoist's  "  Constitutional  His- 
tory," vol.  III.,  pp.  451-463. 


114  THE    TARIFF,    1 83O-1 860. 

from  the  public  at  large.  There  is  much  truth  in  Cal- 
houn's remark  that  the  act  of  1842  was  passed,  not  so 
much  in  compliance  with  the  wishes  of  the  manufacturers 
is  because  the  politicians  wanted  an  issue.1 

The  act  of  1842  remained  in  force  for  but  four  years. 
It  was  in  turn  superseded  by  the  act  of  1846,  again  a 
political  measure,  passed  this  time  by  the  Democrats. 
The  act  of  1846  carried  out  the  suggestions  made  by 
Secretary  Walker  in  his  much  debated  Treasury  Report 
of  1845.  Indeed,  it  may  be  regarded  as  practically  framed 
by  Walker,  who  professed  to  adhere  to  the  principle  of 
free  trade  ;  and  the  act  of  1846  is  often  spoken  of  as  an 
instance  of  the  application  of  free-trade  principles.  In 
fact,  however,  it  effected  no  more  than  a  moderation  in 
the  application  of  protection.  The  act  established  several 
schedules,  indicated  by  the  letters  A,  B,  C,  D,  and  so  on. 
All  the  articles  classed  in  schedule  A  paid  100  per  cent., 
all  in  schedule  B  paid.  40  per  cent.,  all  in  schedule  C  paid 
30  per  cent.,  and  so  on  for  the  rest.  Schedule  C,  with  the 
30  per  cent,  duty,  included  most  articles  with  which  the 
protective  controversy  is  concerned, — iron  and  metals  in 
general,  manufactures  of  metals,  wool  and  woollens,  man- 
ufactures of  leather,  paper,  glass,  and  wood.  Cottons 
were  in  schedule  D,  and  paid  25  per  cent.  Tea  and  coffee, 
on  the  other  hand,  were  exempt  from  duty. 

1  "  Works,"  vol.  IV.,  pp.  199,  200.  Calhoun  thought  that  a  good  deal 
was  due  also  to  the  influence  of  the  "moneyed  men  "  who  wanted  the 
Treasury  to  be  filled. 


THE    TARIFF,    183O-1860.  Il5 

The  act  of  1846  remained  in  force  till  1857,  when  a  still 
further  reduction  of  duties  was  made.  The  revenue  was 
redundant  in  1857,  and  this  was  the  chief  cause  of  the 
reduction  of  duties.  The  measure  of  that  year  was  passed 
with  little  opposition,  and  was  the  first  tariff  act  since 
1 8 16  that  was  not  affected  by  politics.1  It  was  agreed  on 
all  hands  that  a  reduction  of  the  revenue  was  imperatively 
called  for,  and,  except  from  Pennsylvania,  there  was  no 
opposition  to  the  reduction  of  duties  made  in  it.  The 
framework  of  the  act  of  1846  was  retained, — the  schedules 
and  the  ad  valorem  duties.  The  duty  on  the  important 
protective  articles,  in  schedule  C,  was  lowered  to  24  per 
cent.,  cottons  being  transferred,  moreover,  to  that  sched- 
ule. Certain  raw  materials  were  at  the  same  time  admitted 
free  of  duty. 

The  act  of  1857  remained  in  force  till  the  close  of  the 
period  we  now  have  under  examination.  We  begin  with 
a  high  protective  tariff  in  1832  ;  then  follows  a  gradual 
reduction  of  duties,  ending  in  1842  with  a  brief  period  of 
very  low  duties.  In  the  four  years  1842-46  we  have  a 
strong  application  of  protection.  In  1846  begins  what  is 
often  called  a  period  of  free  trade,  but  is  in  reality  one  of 
moderated  protection.  In  1857  tne  protection  is  still  fur- 
ther moderated,  and  for  a  few  years  there  is  as  near  an 
approach  to  free  trade  as  the  country  has  had  since  18 16. 


1  Seward  said,  in  1857,  that  "  the  vote  of  not  a  single  Senator  will  be 
governed  by  any  partisan  consideration  whatever."  Appendix  to  "  Con- 
gressional Globe,"  1856-57,  p.  344  ;  and  see  Hunter's  speech,  ibid.,  p.  331. 


Il6  THE    TARIFF,    183O-1860. 

.  Turning  now  to  the  economic  effect  of  this  legislation, 
we  have  to  note,  first,  its  connection  with  the  general 
prosperity  of  the  country.  That  there  was  a  distinct 
connection  is  asserted  by  both  protectionists  and  free  trad- 
ers. The  protectionists  tell  us  that  the  compromise  tariff 
caused  the  disastrous  crises  of  1837  and  1839;  tnat  tne 
high  tariff  of  1842  brought  back  prosperity;  that  depres- 
sion again  followed  the  passage  of  the  act  of  1846,  and 
that  the  panic  of  1857  was  precipitated  by  the  tariff  act 
of  1857.  On  the  other  hand,  free  traders  not  infrequently 
describe  the  period  between  1846  and  i860  as  one  of  ex- 
ceptional prosperity,  due  to  the  low  duties  then  in  force. 
It  would  not  be  worth  wrhile  to  allude  to  some  of  these 
assertions,  if  they  were  not  so  firmly  imbedded  in  current 
literature  and  so  constantly  repeated  in  many  accounts  of 
our  economic  history.  This  is  especially  the  case  with 
the  curious  assertion  that  the  crises  of  1837  and  1839  were 
caused  by  the  compromise  tariff  of  1833,  or  connected 
with  it.  This  assertion  had  its  origin  in  the  writings  of 
Henry  C.  Carey,  who  has  been  guilty  of  many  curious 
versions  of  economic  history,  but  of  none  more  remarka- 
ble than  this.  It  may  be  found  in  various  passages  in  his 
works;  and  from  them  it  has  been  transferred  to  the 
writings  of  his  disciples  and  to  the  arguments  of  protec- 
tionist  authors  and   speakers   in  general.1     Yet  no  fair- 

1  References  to  the  supposed  effects  of  the  act  of  1833  abound  in  Carey's 
works.  As  good  a  specimen  as  any  is  this  :  "  Agitation  succeeded  in  pro- 
ducing a  total  change  of  system  in  the  tariff  of  1833.     *     *     *     Thencefor- 


THE    TARIFF,    183O-I860.  WJ 

minded  person,  having  even  a  superficial  knowledge  of 
the  economic  history  of  these  years,  can  entertain  such 
notions.  The  crises  of  1837  and  1839  were  obviously  due 
to  quite  a  different  set  of  causes — to  the  bank  troubles, 
the  financial  mistakes  of  Jackson's  administration,  the  in- 
flation of  the  currency,  and  to  those  general  conditions  of 
speculation  and  unduly  expanded  credit  which  give  rise 
to  crises.  The  tariff  act  had  nothing  whatever  to  do  with 
them.    Indeed,  the  reductions  in  duty  under  it,  as  we  have 

ward  the  building  of  furnaces  and  mills  almost  wholly  ceased,  the  wealthy 
English  capitalists  having  thus  succeeded  in  regaining  the  desired  control  of 
the  great  American  market  for  cloth  and  iron.  As  a  consequence  of  their 
triumph  there  occurred  a  succession  of  crises  of  barbaric  tendency,  the 
whole  terminating,  in  1842,  in  a  scene  of  ruin  such  as  had  never  before  been 
known,  bankruptcy  among  the  people  being  almost  universal,"  etc.  "  Let- 
ters on  the  Iron  Question  "  (1865),  p.  4,  printed  in  his  "Miscellaneous 
Works  "  (1872).  To  the  same  effect,  see  his  "  Financial  Crises,"  p.  18  ; 
"Review  of  Wells'  Report,"  p.  5;  "  Social  Science,"  II.,  p.  225.  Professor 
Thompson  makes  the  same  statement  in  his  "  Political  Economy,"  p.  353. 
See  also  Elder,  "Questions  of  the  Day"  (1871),  pp.  200,  201.  Senator 
Evarts,  in  a  speech  made  in  1883,  ascribed  to  the  act  of  1833  "  a  bank- 
ruptcy which  covered  the  whole  land,  without  distinction  of  sections,  with 
ruin."  The  pedigree  of  statements  of  this  kind,  which  are  frequent  in  cam- 
paign literature,  can  be  traced  back  to  Carey.  Doubtless  Carey  wrote  in 
good  faith  ;  but  his  prejudices  were  so  strong  as  to  prevent  him  from  taking 
a  just  view  of  economic  history. 

Oddly  enough,  Calhoun  ascribed  the  crisis  of  1837  to  the  fact  that  duties 
under  the  act  of  1833  remained  too  high.  The  high  duties  brought  in  a  large 
revenue  and  caused  a  surplus  in  the  Treasury  ;  the  deposit  and  distribution 
of  this  brought  inflation  and  speculation,  and  eventually  a  crisis  ("  Works," 
IV.,  p.  174).  No  doubt  the  high  duties  were  one  cause  of  the  government 
surplus,  and  thereby  aided  in  bringing  about  the  crisis,  so  that  this  view, 
incomplete  as  it  is,  has  more  foundation  than  Carey's  explanation.  On  the 
other  hand,  Clay,  as  might  be  expected,  took  pains  to  deny  that  the  act  of 
1833  had  any  thing  to  do  with  the  troubles  of  the  years  following  its  passage 
("  Works,"  II.,  pp.  530,  531  ;  edition  of  1844). 


Il8  THE    TARIFF,    1830-1860. 

seen,  were  slight  until  1840,  and  could  hardly  have  influ- 
enced in  any  degree  the  breaking  out  of  the  panics.  Even 
if  the  reductions  of  duty  had  been  greater,  and  had  been 
made  earlier,  they  would  probably  have  had  no  effect, 
favorable  or  unfavorable,  on  the  inflation  of  the  earlier 
years  or  on  the  depression  which  followed. 

We  may  dispose  at  this  point  of  a  similar  assertion  oc- 
casionally made  in  regard  to  the  crisis  of  1857, — that  the 
tariff  act  of  1857  caused  or  intensified  it.  This  view  also 
is  traceable,  probably,  to  Carey.  It  appears  in  his  writ- 
ings and  in  those  of  his  disciples.1  In  fact,  the  crisis  of 
1857  was  an  unusually  simple  case  of  activity,  speculation, 
over-banking,  panic,  and  depression ;  and  it  requires  the 
exercise  of  great  ingenuity  to  connect  it  in  any  way  with 
the  tariff  act.  As  it  happened,  indeed,  the  tariff  was 
passed  with  some  hope  that  it  would  serve  to  prevent  the 
crisis.  Money  was  accumulating  in  the  Treasury  ;  and  it 
was  hoped  that  by  reducing  duties  the  revenue  would  be 
diminished,  money  would  be  got  out  of  the  Treasury,  and 
the  stringency,  which  was  already  threatening,  prevented.2 

1  Carey  speaks  in  one  place  of  "the  terrific  free-trade  crisis  of  1857." 
"  Letters  to  Colfax," p.  15  ;  "Financial  Crises,"  p.  8  ;  "  Review  of  Wells," 
p.  5  (all  in  his  "  Miscellaneous  Works").  Thompson  ("Political  Econ- 
omy," p.  357)  says  :  "  In  1857,  Congress  reduced  the  duties  twenty-five  per 
cent.  *  *  *  It  at  once  intensified  all  the  unwholesome  tendencies  in  our 
commercial  and  industrial  life.  *  *  *  Another  great  panic  followed 
through  the  collapse  of  unsound  enterprises." 

2  See  a  letter  from  a  Boston  merchant  to  Senator  Wilson,  "Congr.  Globe, 
1856—57,  Appendix,"  p.  344  ;  and  the  statement  by  Senator  Hunter, 
ibid.,  329. 


THE    TARIFF,    183O-1860.  1 19 

The  reduction  failed  to  prevent  the  panic  ;  but,  at  the 
time,  it  would  have  been  considered  very  odd  to  ascribe 
the  disaster  to  the  tariff  act. 

On  the  other  hand,  it  has  been  very  often  said  that  the 
activity  of  trade  in  1 $43-44  was  due  to  the  enactment  of 
the  protective  tariff  act  of  1842.  There  may  be  a  degree 
of  truth  in  this.  The  unsettled  state  of  legislation  on  the 
tariff  before  the  act  of  1842  was  passed  must  have  been  an 
obstacle  to  the  revival  of  confidence.  After  July  1,  1842, 
there  was  the  uniform  duty  of  20  per  cent.  ;  nay,  it  was 
doubtful  whether  there  was  by  law  even  that  duty  in 
force.  It  was  certain  that  Congress  would  wish  not  to 
retain  the  horizontal  rate,  but  would  try  to  enact  a  new 
tariff  law  ;  yet  the  quarrel  between  the  Whigs  and  Tyler 
made  the  issue  quite  doubtful.  Such  uncertainty  neces- 
sarily operated  as  a  damper  on  trade ;  and  the  passage  of 
any  act  whatever,  settling  the  tariff  question  for  the  time 
being,  would  have  removed  one  great  obstacle  to  the  re- 
turn of  activity  and  prosperity.  It  is  even  possible  that 
the  passage  of  the  act  of  1842  may  have  had  a  more  direct 
effect  than  this.  No  doubt,  in  the  regular  recurrence  of 
waves  of  activity  and  depression,  the  depression  of  1840- 
42  would  soon  have  been  followed,  in  any  event,  by  a 
period  of  activity.  The  point  at  which  activity  will  begin 
to  show  itself  under  such  circumstances  is  largely  a  mat- 
ter of  chance.  It  begins,  for  some  perhaps  accidental 
reason,  with  one  industry  or  set  of  idustries,  and,  the 
materials  for  general  revival  being  ready,  then  spreads 


120  THE    TARIFF,    183O-1860. 

quickly  to  the  others.  In  the  same  way,  when  the  mate- 
rials for  a  crisis  are  at  hand,  a  single  accidental  failure 
may  precipitate  a  general  panic.  In  1842-43  the  high 
duties  of  the  tariff  act  probably  helped  to  make  profits 
large  for  the  time  being  in  certain  manufactures,  notably 
those  of  cotton  and  iron.  Prosperity  in  these  set  in,  and 
may  have  been  the  signal  for  a  general  revival  of  confi- 
dence and  for  a  general  extension  of  business  operations. 
To  that  extent,  it  is  not  impossible  that  the  protective 
tariff  of  1842  was  the  occasion  of  the  reviving  business 
of  the  ensuing  years.  But  it  is  a  very  different  thing 
from  this  to  say  that  the  tariff  was  the  cause  of 
prosperity,  and  that  depression  would  have  continued 
indefinitely  but  for  the  re-establishment  of  high  protec- 
tive duties. 

In  truth,  there  has  been  a  great  deal  of  loose  talk  about 
tariffs  and  crises.  Whenever  there  has  been  a  crisis,  the 
free  traders  or  protectionists,  as  the  case  may  be,  have 
been  tempted  to  use  it  as  a  means  for  overthrowing  the 
system  they  opposed.  Cobden  found  in  the  depression  of 
1839-40  a  powerful  argument  in  his  crusade  against  the 
corn  laws,  and  knew  that  a  return  of  prosperity  would 
work  against  him.1  Within  a  few  years,  the  opponents 
of  protection  in  this  country  have  found  in  general  de- 
pression a  convenient  and  effective  argument  against  the 
tariff.  In  the  same  way,  the  protectionists  have  been 
tempted  to  use  the  crises  of  1837  and  1857,  and  conversely 

1  See  passages  in  Morley's  "  Life  of  Cobden,"  pp.  162,  163,  210. 


THE    TARIFF,    183O-1860.  121 

the  revival  of  1843-44,  to  nelp  their  case.  But  the  effect 
of  tariffs  cannot  be  traced  by  any  such  rough-and-ready 
method.  The  tariff  system  of  a  country  is  but  one  of 
many  factors  entering  into  its  general  prosperity.  Its 
influence,  good  or  bad,  may  be  strengthened  or  may  be 
counteracted  by  other  causes  ;  while  it  is  exceedingly  diffi- 
cult, generally  impossible,  to  trace  its  separate  effect. 
Least  of  all  can  its  influence  be  traced  in  those  varia- 
tions of  outward  prosperity  and  depression  which  are 
marked  by  "  good  times  "  and  crises.  A  protective  tariff 
may  sometimes  strengthen  other  causes  which  are  bring- 
ing on  a  commercial  crisis.  Some  such  effect  is  very 
likely  traceable  to  the  tariff  in  the  years  before  the  crisis 
of  1873.  It  may  sometimes  be  the  occasion  of  a  revival 
of  activity,  when  the  other  conditions  are  already  favora- 
ble to  such  a  revival.  That  may  have  been  the  case 
in  1843.  But  these  are  only  incidental  effects,  and  lie 
quite  outside  the  real  problem  as  to  the  results  of  pro- 
tection. As  a  rule,  the  tariff  system  of  a  country 
operates  neither  to  cause  nor  to  prevent  crises.  They 
are  the  results  of  conditions  of  exchange  and  produc- 
tion on  which  it  can  exercise  no  great  or  permanent 
influence. 

Remarks  of  the  same  kind  may  be  made  on  the  fre- 
quent assertion  that  the  prosperity  of  the  country  from 
1846  to  i860  can  be  traced  to  the  low  duties  then  in 
force.  He  who  is  convinced,  on  grounds  of  general  rea- 
soning and  of  general  experience,  that  the  principles  of 


122  THE    TARIFF,    183O-1860. 

free  trade  are  sound  and  that  protective  duties  are  harm- 
ful, can  fairly  deduce  the  conclusion  that  the  low  tariffs 
of  1846  and  1857  contributed,  so  far  as  they  went,  to  gen- 
eral prosperity.  But  a  direct  connection  cannot  be  traced. 
A  number  of  favorable  causes  were  at  work,  such  as  the 
general  advance  in  the  arts,  the  rapid  growth  of  the  rail- 
way system  and  of  ocean  communication,  the  Californian 
gold  discoveries.  There  is  no  way  of  eliminating  the 
other  factors,  and  determining  how  much  can  be  ascribed 
to  the  tariff  alone.  Even  in  the  growth  of  international 
trade,  where  some  direct  point  of  connection  might  be 
found,  we  cannot  measure  the  effect  of  low  duties;  for 
international  trade  was  growing  between  all-  countries 
under  the  influence  of  cheapened  transportation  and  the 
stimulus  of  the  great  gold  discoveries.1  The  inductive, 
or  historical,  method  absolutely  fails  us  here. 


1  The  growth  of  foreign  trade  under  the  tariffs  of  1846  and  1857  was  cer- 
tainly very  striking.  In  Grosvenor's  "  Does  Protection  Protect  ?  "  there  is 
a  table  showing  the  imports  and  exports  per  head  of  population  from  1821 
to  1869,  in  which  it  is  stated  that  the  annual  average  ^per  head  of  popula- 
tion was  : 

Imports. 
In  1843-46,  $4.66 

"   1847-50,  6.35 

"  1851-55,  9.10 

"  1856-60,  10.41 

The  imports  and  exports  were,  in  millions  of  dollars 

Annual  average  of  the  four  years  1843-46, 

"     "       "        ««     1847-50, 

"  "         "     V    five      "     1851-55, 

.1  u  .       a        <<  i<       J856-60, 

But  how  are  we  to  measure  the  share  which  low  duties  had  in  promoting 
this  growth  ? 


Exports. 

$5.22 

6.32 

7-35 

9-45 

Imports. 

Exports. 

92.7 

IOO 

138.3 

136.8 

231. 

186.2 

305- 

278.2 

THE    TARIFF,    183O-1860.  1 23 

We  turn  now  to  another  inquiry,  as  to  the  effect  of  the 
fluctuating  duties  of  this  period  on  the  protected  indus- 
tries. That  inquiry,  it  is  hardly  necessary  to  say,  leads  us 
to  no  certain  conclusion  as  to  the  effect  of  the  duties  on 
the  welfare  of  the  country  at  large.  It  is  quite  conceiv- 
able, and  indeed  on  grounds  of  general  reasoning  at  least 
probable,  that  any  stimulus  given  to  the  protected  indus- 
tries indicated  a  loss  in  the  productive  powers  of  the  com- 
munity as  a  whole.  But  it  has  often  been  asserted,  and 
again  often  denied,  that  the  duties  caused  a  growth  of 
certain  industries ;  and  it  is  worth  while  to  trace,  if  we 
can,  the  tangible  effect  in  this  direction,  even  though  it 
be  but  a  part  of  the  total  effect. 

It  is  the  production  of  iron  in  the  unmanufactured  form 
that  has  been  most  hotly  discussed  in  the  protective  con- 
troversy. And  in  regard  to  this,  fortunately,  we  have 
good,  if  not  complete,  information. 

The  duty  on  pig-iron  had  been  62^  cents  a  hundred- 
weight under  the  tariff  act  of  1828.  In  1832  it  was  re- 
duced to  50  cents,  or  $10  per  ton.  This  rate  was  equiva- 
lent to  about  40  per  cent,  on  the  foreign  price  at  that 
time;  and,  under  the  Compromise  Act  of  1833,  it  was 
gradually  reduced,  until  it  reached  20  per  cent,  in  1842. 
Under  the  act  of  1842,  the  duty  was  again  raised  to  $10  a 
ton.  In  1846  it  was  made  30  per  cent,  on  the  value,  and 
in  1857  24  Per  cent.  As  the  value  varied,  the  duty  under 
the  last  two  acts  varied  also.  In  1847,  a  time  of  high 
prices,  the  duty  of  30  per  cent,  was  equal  to  $5,75   per 


124 


THE    TARIFF,    1830-1860. 


ton  ;  in  1852  it  was  only  $3.05  ;  in  1855  it  was  as  high  as 
$6;  in  i860  it  again  fell  to  $3.40.' 

The  duty  on  bar-iron  was  of  two  kinds  until  1846, — a 
duty  on  hammered  bar-iron,  and  another  heavier  duty  on 
rolled  bar-iron.  The  duty  on  hammered  bar  was,  in  1832, 
fixed  at  90  cents  per  hundredweight,  or  $18  per  ton. 
That  on  rolled  bar  was  nearly  twice  as  heavy,  being  $30 
per  ton,  or  nearly  100  per  cent,  on  the  value.  These  duties 
were  reduced  under  the  Compromise  Act ;  and,  as  we 
have  seen,  the  reduction  on  rolled  bar  was  very  great, 
and,  in  1842,  very  sudden.  Under  the  act  of  1842,  the 
duty  on  hammered  bar  was  made  $17  per  ton,  that  on 
rolled  bar  $25  per  ton.  The  act  of  1846  gave  up  finally 
the  discrimination  between  the  two  kinds,  and  admitted 


1  The  duty  from  year  to  year,  on  the  average,  for  the  fiscal  years  ending 
June  30th,  is  given  in  the  following  table.  The  foreign  value,  on  which  the 
duty  was  computed,  is  also  given.  The  figures  are  compiled  from  the  tables 
given  in  French,  "  History  of  Iron  Manufacture,"  p.  70,  and  in  the  "  Re- 
port of  the  Iron  and  Steel  Association  for  1876,"  p.  182. 

Duty 


(30  percent,  till  1857, 

Year  ending  June  30th.                       Average  value.                      24  per  cent,  after  1857.) 

1847          .          .          .              $19.90          .          .          .            $5-95 

1848 

15.80 

4-75 

1849 

I3-30 

4.00 

1850 

12.70 

3.80 

1851 

I2.6o 

3-75 

1852 

I0.20 

3-05 

1353 

I3.40 

4.00 

1854 

18.OO 

5.40 

1855 

20.00 

6.00 

1856 

19.80 

5  95 

1857 

I9.50 

5.85 

1858 

17.60     . 

4.20 

1859 

15.20 

3-65 

i860 

14.10 

3-40 

THE    TARIFF,    183O-1860.  125 

both  alike  at  a  duty  of  30  per  cent. ;  and  the  act  of  1857 
admitted  them  at  24  per  cent.1 

Before  proceeding  to  examine  the  economic  effect  of 
these  duties,  it  should  be  said  that  our  information  as  to 
the  production  of  iron  is  in  many  ways  defective,  and 
that  the  statements  relating  to  it  in  the  following  para- 
graphs cannot  be  taken  to  be  more  than  roughly  accurate. 
The  government  figures  give  us  trustworthy  information 
as  to  the  imports ;  but  for  the  domestic  production  we 
must  rely,  at  least  for  the  earlier  years,  on  estimates 
which  are  often  no  more  than  guesses.  Nevertheless,  the 
general  trend  of  events  can  be  made  out  pretty  clearly, 
and  we  are  able  to  draw  some  important  conclusions.5 

It  seems  to  be  clear  that  the  importation  of  iron  was 
somewhat  affected  by  the  duties.  The  years  before  1842, 
when  the  compromise  tariff  was  in  force,  were  years  of 
such  disturbance  that  it  is  not  easy  to  trace  any  effects 
clearly  to  the  operation  of  the  tariff;  but  imports  during 
these  years  were  a  smaller  proportion  of  the  total  con- 
sumption of  iron  than  they  were  during  the  period  after 


1  Between  1832  and  1842,  an  exception  had  been  made  for  one  class  of 
rolled  iron, — iron  rails  actually  laid  down  on  railroads.  These  were  ad- 
mitted free  of  duty  ;  or,  rather,  a  drawback  was  granted  of  the  full  amount 
of  duty  due  or  paid  on  them.  Between  1828  and  1832,  a  drawback  had 
been  granted  such  as  to  make  the  duty  on  railroad  iron  only  25  per  cent. 
After  1842,  however,  it  was  charged  with  duty  like  any  other  iron. 

'The  reader  who  wishes  to  examine  further  the  data  as  to  the  production 
of  iron  before  i860,  is  referred  to  the  Appendix  to  the  Quarterly  Journal  of 
Economics  for  April,  1888,  vol.  II.,  pp.  377-382,  where  I  have  considered 
the  figures  in  detail. 


126  THE    TARIFF,    183O-1860. 

1846.  It  must  be  remembered  that  from  1830  till  1842 
all  railroad  iron  was  admitted  free  of  duty,  and  that  a 
large  part  of  the  imported  iron  consisted  of  rails.  If  this 
quantity  be  deducted  from  the  total  import,  the  remaining 
quantity,  which  alone  was  affected  by  the  duties,  becomes 
still  smaller  as  compared  with  the  domestic  product.  In 
1841  and  1842,  when  duties  began  to  be  low  under  the 
operation  of  the  Compromise  Act,  imports  were  larger  in 
proportion  to  the  home  product.  On  the  other  hand,  in 
the  four  years,  1843-46,  under  the  act  of  1842,  they  show 
a  distinct  decrease.  After  1847,  they  show  as  distinct  an 
increase,  and  continue  to  be  large  throughout  the  period 
until  i860.  In  the  speculative  and  railroad-building  years, 
from  1852  to  1857,  tne  importation  was  especially  heavy  ; 
and  in  1853  and  1854  the  total  quantity  of  iron  imported 
was  almost  as  great  as  the  home  product. 

The  most  effective  part  of  the  iron  duties  until  1846 
was  the  heavy  discriminating  duty  on  rolled  bar-iron. 
That  duty  amounted  (from  18 18  till  1846,  except  during 
a  few  months  in  1842)  to  about  100  per  cent.  Rolled 
iron,  made  by  the  puddling  process  and  by  rolling,  is  the 
form  of  bar-iron  now  in  common  use.  The  process  was 
first  applied  successfully  by  Cort  in  England  about  1785, 
and  in  that  country  was  immediately  put  into  extensive 
use.  It  made  bar-iron  much  more  cheaply  and  plentifully 
than  the  old  process  of  refining  in  a  forge  and  under  a 
hammer;  and,  at  the  present  time,  hammered  bar  of  the 
old-fashioned  kind  has  ceased  to  be  made,  except  in  com- 


THE    TARIFF,    1830-1860.  1 27 

paratively  small  quantities  for  special  purposes.  Cort's 
processes  of  puddling  and  rolling  were  practicable  only 
through  the  use  of  bituminous  coal  and  coke.  The 
abundant  and  excellent  coal  of  Great  Britain  gave  that 
country  an  enormous  advantage  in  producing  rolled  iron, 
as  it  had  already  done  in  smelting  pig-iron,  and  put  her  in 
that  commanding  position  as  an  iron  producer  which  she 
continues  to  occupy  to  the  present  day.  When  rolled 
iron  first  began  to  be  exported  from  England  to  foreign 
countries,  it  aroused  strong  feelings  of  jealousy,  being  so 
much  cheaper  than  other  iron.  Several  countries  fought 
against  the  improvement  by  imposing  discriminating 
duties  on  it.1  That  course  was  adopted  in  the  United 
States.  In  18 18,  a  discriminating  duty  was  put  on  rolled 
iron,  partly  because  it  was  said  to  be  inferior  in  quality  to 
hammered  iron,  and  partly  from  a  feeling  in  favor  of  pro- 
tecting the  domestic  producers  of  hammered  iron.  The 
duty  was  retained,  as  we  have  seen,  till  1846.  Its  effect 
was  neutralized  in  part  by  the  free  admission  of  railroad 
iron,  which  was  one  form  of  rolled  iron ;  but,  so  far  as  it 
was  applied  to  rolled  iron  in  general,  it  simply  prevented 
the  United  States  from  sharing  the  benefit  of  a  great  im- 
provement in  the  arts.  It  had  no  effect  in  hastening  the 
use  of  the  puddling  and  rolling  processes  in  the  country. 
Though  introduced  into  the  United  States  as  early  as 

1  In  France  a  discriminating  duty  equivalent  to  120  per  cent,  was  im- 
posed in  1833  on  iron  imported  by  sea,  i.  e.,  on  English  iron.  Arme, 
"  Tarifs  de  Douanes,"  I.,  144,  145.  The  discrimination  was  maintained 
until  1855.     Ibid.,  271. 


128  THE    TARIFF,    183O-1860. 

18 17,  these  processes  got  no  firm  hold  until  after  anthra- 
cite coal  began  to  be  used,  about  1840,  as  an  iron-making 
fuel.1 

We  turn  now  to  the  history  of  the  domestic  production. 
By  far  the  most  important  event  in  that  history  is  the  use 
of  anthracite  coal  as  a  fuel,  which  began  about  1840. 
The  substitution  of  anthracite  for  wood  (charcoal)  revo- 
lutionized the  iron  trade  in  the  United  States  in  the  same 
way  as  the  use  of  bituminous  coal  (coke)  had  revolution- 

1  The  first  puddling  and  rolling  mill  in  the  United  States  was  put  up  in 
Pennsylvania  in  1817.  The  first  puddling  in  New  England  was  done  as 
late  as  1835.  Wood  was  used  as  fuel  at  the  outset.  Swank,  "  Iron  in  All 
Ages,"  166,  330.  The  effect  of  the  duty  on  rolled  iron  cannot  be  better 
described  than  in  the  clear  and  forcible  language  used  by  Gallatin  in  183 1  : 
"  It  seems  impracticable  that  iron  made  with  charcoal  can  ever  compete 
with  iron  made  from  bituminous  coal.  *  *  *  A  happy  application  of 
anthracite  coal  to  the  manufacture  of  iron,  the  discovery  of  new  beds  of 
bituminous  coal,  the  erection  of  iron-works  in  the  vicinity  of  the  most  East- 
erly beds  now  existing,  and  the  improved  means  of  transportation,  which 
may  bring  this  at  a  reasonable  rate  to  the  sea-border,  may  hereafter  enable 
the  American  iron-master  to  compete  in  cheapness  with  foreign  rolled  iron 
in  the  Atlantic  districts.  On  those  contingencies  the  tariff  can  have  no 
effect.  To  persist,  in  the  present  state  of  the  manufacture,  in  that  particu- 
lar competition,  and  for  that  purpose  to  proscribe  the  foreign  rolled  iron,  is 
to  compel  the  people  for  an  indefinite  time  to  substitute  a  dear  for  a  cheap 
article.  It  is  said  that  the  British  iron  is  generally  of  inferior  quality  ;  this 
is  equally  true  of  a  portion  of  that  made  in  America.  In  both  cases  the 
consumer  is  the  best  judge, — has  an  undoubted  right  to  judge  for  himself. 
Domestic  charcoal  iron  should  confine  itself  to  a  competition  with  the  for- 
eign iron  made  from  the  same  fuel."  Gallatin  added,  prophetically  : 
' '  Your  memorialists  believe  that  the  ultimate  reduction  of  the  price  of 
American  iron  to  that  of  British  rolled  iron  can  only,  and  ultimately  will, 
be  accomplished  in  that  Western  region  which  abounds  with  ore,  and  in 
which  are  found  the  most  extensive  formations  of  bituminous  coal." — 
"  Memorial  of  the  Free-Trade  Convention,"  pp.  60,  61. 


THE    TARIFF,    183O-1860.  1 29 

ized  the  English  iron  trade  nearly  a  century  before.  Up 
to  1840,  pig-iron  had  been  smelted  in  this  country  with 
charcoal,  a  fuel  which  was  expensive,  and  tended  to  be- 
come more  and  more  expensive  as  the  nearer  forests  were 
cut  down  and  wood  became  less  easily  attainable.  Char- 
coal pig-iron  could  not  have  competed  on  even  terms  with 
the  coal-made  English  iron.  But  between  1830  and  1840 
it  was  protected  by  the  heavy  duties  on  English  iron  ; 
and,  under  their  shelter,  the  production  in  those  years 
steadily  increased.  There  seems  to  be  no  doubt  that, 
with  lower  duties  or  no  duties  at  all,  the  domestic 
production  would  have  been  less,  and  the  import  greater. 
In  other  words,  the  duty  operated  as  a  true  protective 
duty,  hampering  international  trade  and  increasing  the 
price  of  the  home  product  as  well  as  of  the  imported  iron. 
In  1840,  however,  anthracite  coal  began  to  be  applied 
to  the  making  of  pig-iron.  The  use  of  anthracite  was 
made  possible  by  the  hot  blast, — a  process  which  was  put  in 
successful  operation  in  England  at  nearly  the  same  time.1 
The  importance  of  the  new  method  was  immediately 
appreciated,  and  predictions  were  made  that  henceforth 
there  would  be  no  longer  occasion  for  importing  iron, 
even  under  the  20  per  cent,  duty  of  the  Compromise  Act. 
Many  furnaces   were  changed  from  the  charcoal  to  the 

1  The  hot  blast  was  successfully  applied  in  a  furnace  in  Pennsylvania  in 
1835,  but  the  experiment  was  not  prosecuted.  In  1837,  Crane  applied  it 
in  Wales,  and  about  the  same  time  the  process  was  successfully  used  in 
this  country.  Swank,  "  Iron  in  All  Ages,"  268-273  ;  French,  "  History 
of  the  Iron  Trade,"  58-60. 


130  THE    TARIFF,    183O-1860. 

anthracite  method.1  At  very  nearly  the  same  time,  as  it 
happened,  the  tariff  act  of  1842  was  passed,  imposing 
heavy  duties  on  all  kinds  of  iron,  among  others  on  the 
railroad  iron  which  had  hitherto  been  admitted  free. 
Very  shortly  afterwards  a  general  revival  of  trade  set  in. 
Under  the  influence  of  these  combined  causes,  the  pro- 
duction of  iron  was  suddenly  increased.  The  exact 
amount  of  the  increase  is  disputed ;  but  the  production 
seems  to  have  risen  from  somewhere  near  300,000  tons  in 
1840-41,  to  650,000  or  more  in  1846-47.  Some  part  of 
this  great  growth  was  certainly  due  to  the  high  protection 
of  1842  ;  but,  under  any  circumstances,  the  use  of  anthra- 
cite would  have  given  a  great  stimulus  to  the  iron  trade. 
This  is  shown  by  the  course  of  events  under  the  tariff 
acts  of  1846  and  1857.  The  production  remained,  on  the 
whole,  fairly  steady  throughout  the  years  when  these  acts 
were  in  force.  There  was,  on  the  whole,  an  increase  from 
between  500,000  and  600,000  tons  in  the  earlier  years  of 
the  period  to  between  800,000  and  900,000  tons  in  the 
later  years.  For  a  few  years  after  the  passage  of  the  act 
of  1846,  the  reduction  of  the  duty  to  30  per  cent,  had 
little,  if  any,  effect.  Prices  were  high  both  in  England 
and  in  the  United  States  ;  for  it  was  a  time  of  active 
railroad  building  in  England,  and  consequently  of  great 
demand  for  iron.     The  ad  valorem  duty  was  correspond- 

1  See  the  notices  in  Hazard's  "  Statistical  Register,"  I.,  pp.  335,  36S  ; 
III.,  p.  173  ;  IV.,  p.  207.  That  great  results  were  at  once  expected  from 
the  new  method  is  shown  by  an  interesting  speech  of  Nicholas  Biddle's. 
ibid..  II.,  p.  230. 


THE    TARIFF,    183O-1860.  131 

ingly  high.  In  1850-51  the  usual  reaction  set  in,  prices 
went  down,  production  decreased,  and  the  iron-masters 
complained.1  But  the  natural  revival  came  after  a  year 
or  two.  Prices  rose  again  ;  production  increased,  and 
continued  to  increase  until  i860.  Although  the  duty, 
which  had  been  $9  a  ton  under  the  act  of  1842,  was 
no  more  than  $3  and  $4  under  the  24  per  cent,  rate 
which  was  in  force  during  the  years  1858,  1859,  and  i860, 
and  although  these  were  not  years  of  unusual  general 
activity,  the  domestic  production  showed  a  steady  growth. 
The  country  was  growing  fast,  many  railroads  were  in 
course  of  construction,  much  iron  was  needed.  An  un- 
diminished home  product  was  consumed,  as  well  as  largely 
increased  imports. 

The  most  significant  fact  in  the  iron  trade,  however,  is 
to  be  seen,  not  in  the  figures  of  total  production,  but  in 
the  shifting  from  charcoal  to  anthracite  iron.  While  the 
total  product  remained  about  the  same,  the  component 
elements  changed  greatly.     The  production  of  anthracite 


1  The  iron-masters  admitted  that  the  act  of  1846  had  been  sufficiently- 
protective  when  first  passed.  But  in  1849  and  1850,  they  began  to  com- 
plain and  ask  for  higher  duties.  See  *'  Proceedings  of  Iron  Convention  at 
Pittsburg  (1849),"  p.  9  ;  "  Proceedings  of  Convention  at  Albany,"  pp.  27, 
42.  They  certainly  had  a  legitimate  subject  for  complaint  in  the  operation 
of  the  ad  valorem  duty,  in  that  it  tended  to  exaggerate  the  fluctuations  of 
prices.  When  prices  abroad  were  high,  the  duty  was  high  ;  when  prices 
abroad  were  low,  the  duty  was  low.  Consequently,  the  price  of  foreign 
iron  in  the  United  States,  which  is  the  sum  of  the  foreign  price  and  the 
duty,  fluctuated  more  widely  than  the  foreign  price  alone.  This  was  cer- 
tainly an  evil,  especially  with  an  article  whose  price  was  liable  under  any 
conditions  to  vary  so  much  as  the  price  of  iron.    See  the  table  above,  p.  124. 


132 


THE    TARIFF,    183O-1860. 


iron  rose  steadily :  that  of  charcoal  iron  fell  as  steadily. 
The  first  anthracite  furnace  was  built  in  1840.  In  1844 
there  were  said  to  be  twenty  furnaces,  making  65,000  tons 
annually.1  Thence  the  production  rose  with  hardly  an 
interruption  being 


in  1844 
"  1846 
"  1849 

"  1854 
"  1855 
"  1856 

As  the  anthracite 
coal 


65,000  gross  tons. 
110,000  " 
115,000  " 
308,000  net 
343,000  " 
394,000  " 

iron  production  increased,  that  of  char- 
iron  decreased.  Under  the  tarifl  act  of  1842,  a 
large  number  of  new  charcoal  furnaces  had  been  put  up.3 
Many  of  these  had  to  be  given  up  under  the  combined 
competition  of  anthracite  and  of  English  iron.  Some 
maintained  themselves  by  using  coke  and  raw  bituminous 
coal,  in  those  parts  of  the  country  where  bituminous  coal 
was  to  be  had 4 ;  others  disappeared.     That  at  least  some 


1  See.  a  '*  Letter  of  the  Philadelphia  Coal  and  Iron  Trade  to  the  Commit- 
tee on  Finance  "  (pamphlet,  Philadelphia,  1844). 

2  The  figure  for  1846  is  that  given  in  Taylor,  "Statistics  of  Coal,"  p. 
133.  Swank  gives  the  figure  for  1846  as  123,000  (gross  ?)  tons.  "  Iron  in 
All  Ages,"  p.  274.  The  figures  for  1849-56  are  from  Lesley,  "  Iron 
Manufacturers'  Guide  (1859),"  pp.  751,752.  Those  given  by  Grosvenor, 
11  Does  Protection  Protect?"  p.  225,  vary  somewhat  ;  but  the  differences 
are  not  great. 

8  See  the  figures  in  Grosvenor,  p.  215.  There  were  built  in  1843  9  char- 
coal furnaces  ;  in  1844,  23  ;  in  1845,  35  ;  in  1846,  44  ;  in  1847,  34  ;  in 
1848,  28  ;  in  1849,  14. 

4  The  use  of  coke  began  in  the  United  States  about  1850,  but  was  of 
little  importance  until  after  1856.  The  use  of  raw  bituminous  coal  was  in- 
troduced about  1850  in  the  Shenango  and  Mahoning  valleys  (on  the  border 


THE    TARIFF,    183O-1860.  1 33 

of  them  should  disappear  was  inevitable.  Charcoal  iron 
for  general  use  was  a  thing  of  the  past ;  and  the  effect  of 
the  tariff  of  1842  was  to  call  into  existence  a  number  of 
furnaces  which  used  antiquated  methods,  and  before  long 
must  have  been  displaced  in  any  event  by  anthracite 
furnaces 

The  use  of  anthracite  not  only  stimulated  the  produc- 
tion of  pig-iron,  but  also  that  of  rolled  iron  and  railroad 
bars.  Anthracite  was  first  used  in  puddling  and  reheating 
in  1844  and  1845,1  an<^  thenceforward  rolled  iron  was  made 
regularly  in  large  quantities.  In  1856  the  production  of 
rolled  iron  was  nearly  500,000  tons.2  Iron  rails  first  began 
to  be  made  while  the  tariff  act  of  1842  was  in  force, 
though  the  steps  towards  making  them  were  taken  even 
before  that  act  put  an  end  to  the  free  admission  of  Eng- 
lish rails.3     With  the  decline  in  railroad  building  and  the 

between  Pennsylvania  and  Ohio),  where  there  is  suitable  coal.  Swank, 
"  Iron  in  All  Ages,"  pp.  2S 1-284.  in  the  "  Report  of  the  American  Iron 
and  Steel  Association  for  1876  "  (prepared  by  Swank),  the  following  figures 
are  given  of  the  production  of  iron  with  the  various  kinds  of  fuel.  I  have 
selected  a  few  typical  years  : 


Anthracite 

Charcoal 

Bituminous  coal 

Year. 

iron. 

iron. 

and  coke  iron. 

Total. 

1854 

339,000 

342,000 

55.000 

736,000 

1856 

443,000 

370,000 

70,000 

883,000 

1858 

362,000 

285,000 

58,000 

705,000 

i860 

519,000 

278,000 

122,000 

919,000 

The  figures  here  denote  net  tons. 

Speech  of  A.  S.  Hewitt,  in  "  Proceedings  of  Iron  Convention  at  Albany  " 
(1849),  P-  54- 

2  Lesley,   "  Iron  Manufacturers'  Guide,"  p.  761. 

3  See  a  pamphlet,  "Observations  on  the  Expediency  of  Repealing  the 
Act  by  which  Railroad  Iron  is  Released  from  Duty,"  1842.  It  gives  an  ac- 
count of  large  rolling  mills  then  being  erected  at  Danville,  Pennsylvania. 


134  THE    TARIFF,    183O-1860. 

general  fall  in  iron  prices,  which  took  place  in  1849,  many 
of  the  rail  mills  stopped  work.  But  the  business  revived 
with  the  general  prosperity  which  set  in  early  in  the  dec- 
ade, and  the  production  of  rails  steadily  increased  until 
1856.  Under  the  influence  of  the  crisis  of  1857  it  fell, 
but  soon  rose  again,  and  in  i860  was  more  than  200,000 
tons.1 

To  sum  up:  The  high  duty  on  iron  in  its  various  forms 
between  1832  and  1841,  and  again  in  1842-46,  impeded 
importation,  retarded  for  the  United  States  that  cheapen- 
ing of  iron  which  has  been  one  of  the  most  important 
factors  in  the  march  of  improvement  in  this  century,  and 
maintained  in  existence  costly  charcoal  furnaces  long 
after  that  method  had  ceased  in  Great  Britain  to  be  in 
general  use.  The  first  step  towards  a  vigorous  and 
healthy  growth  of  the  iron  industry  was  in  the  use  of  an- 
thracite in  1840.  ■  That  step,  so  far  from  being  promoted 
by  the  high  duties,  was  taken  in  a  time  when  duties  were 
on  the  point  of  being  reduced  to  the  20  per  cent,  level. 
Hardly  had  it  been  taken  when  the  high  duties  of  the 
tariff  act  of  1842  brought  about  (not  indeed  alone,  but  in 
conjunction  with  other  causes)  a  temporary  return  to  the 


1  See 

the    figures  given  in  " 

Report 

of  Iron 

and  Steel  Association 

fq 

1876,"  p 

.  165.     The 

production 

of 

rails 

is 

there  stated  to  have  been  I 

In  1849 
"  1850 
"  1854 

"  1856 

"  1857 
'■'■  i860 

24,000  tons. 

44,000  " 
108,000  " 
180,000  " 
162,000  " 
205,000     " 

THE    TARIFF,    183O-1860.  1 35 

old  charcoal  process.  A  number  of  new  charcoal  furnaces 
were  built,  unsuited  to  the  industry  of  the  time  and  cer- 
tain to  succumb  before  long.  Under  the  lower  duties 
from  1846  to  i860,  the  charcoal  production  gradually  be- 
came a  less  and  less  important  part  of  the  iron  industry, 
and  before  the  end  of  the  period  had  been  restricted  to 
those  limits  within  which  it  could  find  a  permanent 
market  for  the  special  qualities  of  its  iron.1  On  the  other 
hand,  the  lower  duties  did  not  prevent  a  steady  growth  in 
the  making  of  anthracite  iron ;  while  the  production  of 
railroad  iron  and  of  rolled  iron  in  general,  also  made  pos- 
sible by  the  use  of  anthracite,  showed  a  similar  steady 
progress.  There  is  no  reason  to  doubt  that,  had  there 
been  no  duty  at  all,  there  would  yet  have  been  a  large 
production  of  anthracite  pig-  and  rolled  iron.  Meanwhile 
the  country  was  rapidly  developing,  and  needed  much 
iron.  The  low  duties  permitted  a  large  importation  of 
foreign  iron,  in  addition  to  a  large  domestic  production. 
The  comparative  cheapness  and  abundance  of  so  import- 
ant an  industrial  agent  could  not  have  operated  other- 
wise than  to  promote  material  prosperity. 

We  turn  now  to  another  industry, — the  manufacture  of 
cotton  goods,  by  far  the  largest  and.  most  important 
branch  of  the  textile  industry.     Here  we  are  met  at  the 

1  Charcoal  iron  has  qualities  which  cause  a  certain  quantity  of  it  to  be  in 
demand  under  any  circumstances.  Since  it  settled  down,  about  i860,  to  its 
normal  place  as  a  supplement  to  coal-made  iron,  the  product  has  steadily 
increased  with  the  growing  needs  of  the  country.  In  the  years  1863-65  the 
annual  product  was  about  240,000  tons.     In  1886  it  was  460,000  tons. 


I36  THE    TARIFF,    183O-1860. 

outset  by  the  fact  that,  at  the  beginning  of  the  period 
which  we  are  considering,  the  cotton  manufacture  was  in 
the  main  independent  of  protection,  and  not  likely  to  be 
much  affected,  favorably  or  unfavorably,  by  changes  in 
duties.  Probably  as  early  as  1824,  and  almost  certainly 
by  1832,  the  industry  had  reached  a  firm  position,  in  which 
it  was  able  to  meet  foreign  competition  on  equal  terms.1 
Mr.  Nathan  Appleton,  who  was  a  large  owner  of  cotton 
factory  stocks,  and  who  was  also,  in  his  time,  one  of  the 
ablest  and  most  prominent  advocates  of  protective  duties, 
said  in  1833  that  at  that  date  coarse  cottons  could  not 
have  been  imported  from  England  if  there  had  been  no 
duty  at  all,  and  that  even  on  many  grades  of  finer  goods 
competition  was  little  to  be  feared.  In  regard  to  prints, 
the  American  goods  were,  quality  for  quality,  as  cheap  as 
the  English,  but  might  be  supplanted,  in  the  absence  of 
duties,  by  the  poorer  and  nominally  cheaper  English 
goods, — an  argument,  often  heard  in  our  own  day,  which 
obviously  puts  the  protective  system  on  the  ground  of 
regulating  the  quality  of  goods  for  consumers.  The  gen- 
eral situation  of  the  cotton  manufacture,  as  described  by 
Appleton,  was  one  in  which  duties  had  ceased  to  be  a 
factor  of  much  importance  in  its  development.2 

1  See  the  previous  essay  on  "  Protection  to  Young  Industries,"  Part  III., 
where  an  account  is  given  of  the  history  of  the  cotton  manufacture  up  to 
1824. 

2  See  Appleton's  speech  on  the  Verplanck  bill  of  1833,  "  Congressional 
Debates,"  IX.,  pp.  1216-1217.  Compare  his  remarks  in  the  same  vol- 
ume at  p.   1579. 


THE    TARIFF,    1830-1860.  1 37 

During  the  extraordinary  fluctuations  of  industry  and 
the  gradual  reduction  of  duties  which  ensued  under  the 
compromise  tariff  of  1833,  the  business  of  manufacturing 
cottons  was  profitable  and  expanded,  or  encountered  de- 
pression and  loss,  in  sympathy  with  the  industry  of  the 
country  at  large,  being  influenced  chiefly  by  the  expansion 
of  credit  and  the  rise  of  prices  before  1837  and  1839,  an<^ 
the  crisis  and  liquidation  that  followed  those  years.  Not- 
withstanding the  impending  reductions  of  duty  under  the 
Compromise  Act,  large  investments  were  made  in  the 
business  in  the  earlier  part  of  the  period.  Thus,  in  1835- 
36,  the  Amoskeag  Company  began  on  a  large  scale  its 
operations  in  Manchester,  N.  H.1  The  depression  at  the 
close  of  the  decade  checked  growth  for  a  while,  but  did 
not  prevent  new  investments  from  being  made,  even 
before  the  passage  of  the  act  of  1842  settled  the  tariff 
uncertainty.2  The  best  informed  judges  said  that  the 
causes  of  increase  or  decrease  of  profit  had  been,  as  one 
might  expect,  the  same  as  those  that  produced  fluctua- 
tions in  other  branches  of  business  ;  and  they  made  no 
mention  of  duties  or  of  tariff. "     Appleton's  account  of  the 

1  Potter,  "  History  of  Manchester,"  p.  552.  The  Stark  Mills  were 
built  in  1838,  the  second  Stark  Mills  in  1839. 

2  Earl,  "  History  of  Fall  River,"  pp.  35-37.  "  From  the  panic  of  1837, 
which  affected  every  business  centre  in  the  country,  Fall  River  seems  to 
have  speedily  recovered,  since  within  a  few  years  from  that  date  nearly 
every  mill  in  the  place  was  enlarged,  though  only  one  new  one  was  built." 
Ibid.,  p.  53. 

3  See  the  answers  from  T.  G.  Gary,  treasurer  of  a  Lowell  mill,  and  from 
Samuel  Batchelder  to  circulars  sent  out  in  1845  by  Secretary  Walker.   Batch- 


1 3$  THE    TARIFF,    1830-1860. 

stage  reached  by  the  industry  finds  confirmation  in  a  care- 
ful volume  on  the  cotton  manufacture  in  the  United 
States,  published  in  1840  by  Robert  Montgomery.  This 
writer's  general  conclusions  are  much  the  same  as  those 
which  competent  observers  reach  for  our  own  time. 
Money  wages  were  about  twice  as  high  in  the  United 
States,  but  the  product  per  spindle  and  per  loom  was 
considerably  greater.  The  cotton,  in  his  time,  was  not  so 
well  mixed,  not  so  thoroughly  cleaned,  not  so  well  carded 
in  the  United  States  as  in  England  ;  but,  on  the  other 
hand,  the  Americans  were  superior  in  ordinary  power-loom 
weaving,  as  well  as  in  warping  and  dressing.  Elaborate 
tables  are  given  of  the  expenses  per  unit  of  product  in 
both  countries,  the  final  result  of  which,  when  all  things 
were  considered,  showed  a  difference  of  three  per  cent,  in 
favor  of  the  American  manufactures.  Calculations  of 
this  kind,  which  are  common  enough  in  discussions  of 
protective  duties,  are  apt  to  express  inadequately  the 
multiplicity  of  circumstances  which  affect  concrete  indus- 
try ;  yet  they  may  gauge  with  fair  accuracy  the  general 
conditions,  and  in  this  case  were  made  intelligently  and 
without  bias.  It  is  worth  noting  that  Montgomery  attrib- 
utes the  success  of  the  Americans  in  exporting  cottons  to 


elder,  our  most  trustworthy  informant  on  the  early  history  of  the  cotton 
manufacture,  writes  that  "  the  increase  and  decrease  of  profit  from  1831  to 
1844  have  conformed  very  nearly  to  the  general  prosperity  of  the  country." 
The  circulars  and  answers  are  printed  in  the  appendices  to  Walker's  Re- 
port.    Exec.  Doc.  1845-46,  vol.  II.,  No.  6,  pp.  215,  216,  313. 


THE    TARIFF,    1830-1860.  1 39 

greater  honesty  in   manufacturing  and   to  the  superior 
quality  of  their  goods.1 

During  the  years  following  the  passage  of  the  act 
of  1842,  by  which  the  duties  on  cottons  were  increased 
largely,  the  manufacturers  made  high  profits.  In  Secre- 
tary Walker's  Report,  and  in  other  attacks  on  protective 
duties,  much  was  made  of  this  circumstance,  the  high 
profits  being  ascribed  to  the  new  duties.  The  protec- 
tionists denied  the  connection,  and  a  lively  controversy 
ensued.2  The  truth  seems  to  be  that  the  case  was  not 
different  from  that  usually  presented  in  economic  phe- 
nomena,— several  causes  combined  to  produce  a  single 
general  effect.  The  high  duties  very  likely  served,  in 
part,  to  enable  a  general  advance  of  profits  to  be  main- 
tained for  several  years.     But  there  was  also  an  increased 

1  See  "  Montgomery's  "  Cotton  Manufacture,"  pp.  29,  38,  82,  86,  91, 
101.  The  tables  of  expenses  are  on  pp.  124,  125  ;  the  remarks  on  quality- 
of  goods,  on  pp.  130,  194;  on  wages  and  product,  on  pp.  118-121,  123. 
Montgomery  was  superintendent  of  the  York  Factories  at  Saco,  Maine,  of 
which  Samuel  Batchelder  was  treasurer.  Allusions  to  Montgomery's  book, 
and  confirmation  of  some  of  his  conclusions,  may  be  found  in  Batchelder's 
"  Early  Progress  of  the  Cotton  Manufacture, "-p.  So  and  following. 

At  a  convention  in  favor  of  protection,  held  in  New  York  in  1842,  com- 
mittees were  appointed  on  various  industries.  The  committee  on  cottons 
reported  a  recommendation  to  Congress  of  minimum  duties  on  plain  and 
printed  goods,  but  added  that  these  duties  were  "  more  than  is  necessary 
for  much  the  largest  part  of  the  cotton  goods,"  and  that  "most  of  the 
printed  calicoes  are  now  offered  to  the  consumer  at  lower  prices  than  they 
could  be  imported  under  a  tariff  for  revenue  only." 

2  See  T.  G.  Cary,  "  Results  of  Manufactures  at  Lowell,"  Boston,  1845  ; 
N.  Appleton,  "  Review  of  Secretary  Walker's  Report,"  1846;  and  the 
speeches  of  Rockwell,  "  Congr.  Globe,"  1845-46,  pp.  1034-1037,  and  Win- 
throp,  ibid.,  Appendix,  p.  969. 


HO  THE    TARIFF,    1830-1860. 

export  to  China,  which  proved  highly  profitable.  More- 
over, the  price  of  raw  cotton  was  low  in  these  years,  lag- 
ging behind  the  advance  in  the  prices  of  cotton  goods ; 
and,  as  long  as  this  lasted,  the  manufacturers  made  large 
gains.  The  fact  that  prosperity  was  shared  by  the  cotton 
manufacturers  in  England  shows  that  other  causes  than  the 
new  tariff  must  have  been  at  work. 

On  the  other  hand,  when  the  act  of  1846  was  passed, 
the  protectionists  predicted  disaster  '  ;  but  disaster  came 
not,  either  for  the  country  at  large  or  for  the  cotton  in- 
dustry. Throughout  the  period  from  1846  to  i860  the 
manufacture  of  cotton  grew  steadily,  affected  by  the  gen- 
eral conditions  of  trade,  but  little  influenced  by  the  lower 
duties.  Exact  figures  indicating  its  fortunes  are  not  to  be 
had,  yet  we  have  enough  information  to  enable  us  to  judge 
of  the  general  trend  of  events.  The  number  of  spindles 
in  use  gives  the  best  indication  of  the  growth  of  cotton 
manufacturing.  We  have  no  trustworthy  figures  as  to 
the  number  of  spindles  in  the  whole  country  ;  but  we 
have  figures,  collected  by  a  competent  and  well-informed 
writer,  in  regard  to  Massachusetts.  That  State  has  always 
been  the  chief  seat  of  the  cotton  manufacture,  and  its 
progress  there  doubtless  indicates  what  took  place  in  the 
country  at  large.     The  number  of  spindles  in  Massachu- 

1  Abbott  Lawrence  predicted  in  1849  that  "  all  this  [a  general  crash]  will 
take  place  in  the  space  of  eighteen  months  from  the  time  this  experimental 
bill  goes  into  operation  ;  not  a  specie-paying  bank  doing  business  will 
be  found  in  the  United  States."  "Letters  to  Rives,"  p.  12.  Appleton 
made  a  similar  prediction  in  his  "  Review  of  Walker's  Report,"  p.  28. 


THE    TARIFF,   183O-I860.  141 

setts,  which  was,  in  round  numbers,  340,000  in  1831,  had 
nearly  doubled  in  1840,  was  over  800,000  in  1845,  and 
was  over  1,600,000  in  i860,  having  again  nearly  doubled 
during  the  period  of  low  duties.1  The  same  signs  of 
growth  and  prosperity  are  seen  in  the  figures  of  the 
consumption  of  raw  cotton  in  the  United  States,  which, 
compiled  independently,  reach  the  same  general  result. 
Between  the  first  half  of  the  decade  i840*-50,  and  the 
second  half  of  the  decade  1850-60,  the  quantity  of  raw 
cotton  used  in  the  mills  of  the  United  States  about 
doubled.  The  annual  consumption,  which  had  been 
about  150,000  bales  in  1 830,  rose  to  an  average  of  more 
than  300,000  bales  in  the  early  years  of  the  next  decade, 
and  again  to  one  of  more  than  600,000  bales  in  the  years 
1850-54.  In  the  five  years  immediately  preceding  the 
civil  war,  the   average    annual    consumption    was   about 

1  The  following  figures  are  given  by  Samuel  Batchelder  ina  "  Report  to 
the  Boston  Board  of  Trade,"  made  in  i860  (published  separately  ;  the  essen- 
tial parts  printed  also  in  "  Hunt's  Merchants'  Magazine,"  xlv.,  p.  14) : 

Spindles  in  Massachusetts : 

In  1S31  .  .  .  340,000 

"   1840  .  .  .  624,500  (other  sources  make  it  665,000). 

"   1845  .  .  .  817,500 

11  1850  .  .  .  1,288,000 

"  1855  .  .  .  1,519,500 

"  i860  .  .  .  1,688,500 

For  New  England,  and  the  United  States  as  a  whole,  Batchelder  gives  the 
following  figures,  taken  from  De  Bow,  for  the  years  1840  and  1850.  They 
are  not  entirely  trustworthy,  but  may  be  accepted  as  roughly  accurate.    We 

add  the  census  figures  for  i860  : 

Spindles  in 

New  England.  United  States. 
184O         .          .          1,597,000         .          .  2,112,000 

1850  .  .  2,751,000         .  .  3,634,000 

i860         .  .  5,859,000         .  .  5,236,000 


142  THE    TARIFF,   183O-1860. 

800,000  bales.  During  these  years  the  consumption  of 
cotton  in  Great  Britain  seems  to  have  increased  at  very 
nearly  the  same  rate.1  Such  figures  indicate  that  the 
cotton  manufacture  was  advancing  rapidly  and  steadily. 
Another  sign  of  its  firm  position  is  the  steady  increase 
during  the  same  period  in  the  exports  of  cotton  goods, 
chiefly  to  China  and  the  East.  The  value  of  the  cotton 
goods  exported  averaged  but  little  over  $3,000,000  annu- 
ally between  1838  and  1843,  rose  to  °ver  $4,000,000 
between  1844  and  1849,  was  nearly  $7,000,000  a  year 
between  185 1  and  1856,  was  over  $8,000,000  in  1859,  an<^ 
almost  touched  $11,000,000  in  i860.  An  industry  which 
regularly  exports  a  large  part  of  its  products  can  hardly 
be  stimulated  to  any  considerable  extent  by  protective 
duties.  No  doubt,  the  absence  of  high  duties  had  an 
effect  on  the  range  of  the  industry.  It  was  confined 
mainly  to  the  production  of  plain,  cheap,  staple  cotton 
cloths,  and  was  not  extended  to  the  making  of  finer  and 
"  fancy "  goods.  But,  even  under  the  high  protective 
duties  of  the  last  twenty-five  years,  the  bulk  of  the 
product  has  continued  to  be  of  the  first  mentioned  kind, 
and  cottons  of  that  grade  have  been  sold,  quality  for 
quality,  at  prices  not  above  those  of  foreign  goods;  while 
comparatively  little  progress  has  been  made  in  the  manu- 
facture of  the  finer  grades.2 

1  The  reader  is  referred  to  the  Appendix  to  the  Quarterly  Journal  of 
Economics  for  April,  1888,  for  tables  of  the  consumption  of  cotton  and  of 
the  exports  of  cotton  goods. 

2  Batchelder,  who  was  a  decided  advocate  of  proctection,  wrote  in  1861  a 


THE    TARIFF,  1830-1860.  1 43 

The  situation  of  the  woollen  manufacture  differs  in 
some  important  respects  from  that  of  the  cotton  manu- 
facture, most  noticeably  in  that  it  is  less  favorable  as 
regards  the  supply  of  raw  material.  The  maker  of  cot- 
ton goods  is  sure  of  securing  at  home  cotton  of  the  best 
quality  at  a  price  below  that  which  his  foreign  rival  must 
pay.  But  many  qualities  of  wool  cannot  be  produced  to 
advantage  in  the  United  States ;  while  others  cannot  be 
grown  at  all,  or  at  least,  notwithstanding  very  heavy 
protective  duties,  never  have  been  grown.  Moreover, 
the  raw  material,  when  obtained,  is  neither  so  uniform 
in  quality  nor  so  well  adapted  to  treatment  by  machin- 
ery as  is  the  fibre  of  cotton.  Wool  is  of  the  most 
diverse  quality,  varying   from   a  fine  silk-like  fibre   to  a 

series  of  articles  for  the  Boston  Commercial  Advertiser,  in  which,  after  com- 
paring the  prices  and  qualities  of  English  and  American  shirtings,  he  said  : 
"  The  inquiry  may  then  be  made,  What  occasion  is  there  for  a  protective 
duty  ?  The  answer  is  :  There  would  be  none  in  the  ordinary  course  of  busi- 
ness. But  there  are  sometimes  occasions  when  *  * '  *  there  has  been  a 
great  accumulation  of  goods  in  the  hands  of  manufacturers  abroad,  so  that, 
if  crowded  on  their  market,  it  would  depress  the  price  of  the  usual  supply 
of  their  customers  at  home.  On  such  occasions,  our  warehouse  system  af- 
fords the  opportunity,  at  little  expense,  to  send  the  goods  here,  where  they 
may  be  ready  to  be  thrown  on  the  market  to  be  sold,"  etc. 

In  Ellison's  "  Handbook  of  the  Cotton  Trade,"  it  is  stated,  at  p.  29  ; 
"  It  is  believed  that,  had  it  not  been  for  the  free-trade  policy  of  Great  Brit- 
ain, the  manufacturing  system  of  America  would  at  the  present  time  have 
been  much  more  extensive  than  it  is  ;  but  the  spinners  and  manufacturers 
of  Lancashire  can  as  yet  successfully  compete  with  those  of  Lowell,  though 
for  how  long  a  time  remains  to  be  seen,  for  the  latter  are  yearly  gaining  ex- 
perience and  improving  their  machinery,  so  that  before  long  they  will  be 
able  to  compete  with  the  old  country,  more  especially  should  the  executive 
[sic]  abolish  the  present  protective  system  adopted  with  respect  to  the  im- 
port of  cotton  manufactures."     This  was  written  in  1858. 


144  THE    TARIFF,   1 83O-1 860. 

coarse  hairy  one.  A  process  of  careful  sorting  by  hand 
must  therefore  be  gone  through  before  manufacture  can 
begin.  In  some  branches  of  the  industry  the  qualities  of 
the  fibre,  and  those  of  the  goods  which  are  to  be  made 
from  it,  call  for  more  of  manual  labor,  and  admit  in  less 
degree  of  the  use  of  machinery,  than  is  the  case  with  the 
cottons;  and  it  is  a  familiar  fact,  though  one  of  which  the 
true  meaning  has  not  often  been  grasped,  that  a  need  of 
resorting  to  direct  manual  labor  in  large  proportion  and  a 
difficulty  in  substituting  machinery,  constitute,  under  con- 
ditions of  freedom,  an  obstacle  to  the  profitable  prosecu- 
tion of  a  branch  of  industry  in  the  United  States.  But, 
on  the  other  hand,  certain  qualities  of  wool  are  grown  to 
advantage  in  the  climate  of  this  country  and  under  its 
industrial  conditions,  especially  strong  merino  wools  of 
good  though  not  fine  grade,  of  comparatively  short 
staple,  adapted  for  the  making  of  flannels,  blankets,  and 
substantial  cloths.  At  the  same  time,  machinery  can  be 
applied  to  making  these  fabrics  with,  less  difficulty  than 
to  the  manufacture  of  some  finer  goods. 

Our  information  in  regard  to  the  history  of  the  woollen 
manufacture  is  even  more  defective  than  that  on  iron  and 
cottons.  For  the  period  between  1830  and  1840  we  have 
no  information  that  is  worth  any  thing.  In  1840  the  in- 
dustry was  confined  to  making  satinets  (a  substantial, 
inexpensive  cloth,  not  of  fine  quality),  broadcloths,  flan- 
nels, and  blankets.1     The  tariff  act   of  1842  imposed  on 

1  See  a  passage  quoted  from  Wade's  "Fibre  and  Fabric  "  in  the  Bureau  of 
Statistics'  "  Report  on  Wool  and  Manufactures  of  Wool,"  1887,  p.  xlvii. 


THE    TARIFF,   T.83O-1860.  1 45 

woollen  goods  a  duty  of  40  per  cent.,  and  on  wool  one  of 
three  cents  a  pound  plus  30  per  cent,  on  the  value.  It  is 
said  that  during  the  four  years  in  which  these  rates  were 
in  force  a  stimulus  was  giving  to  the  making  of  finer 
qualities  of  broadcloths,  the  development  being  aided 
by  evasions  of  the  ad  valorem  duty  on  wool.1  The  act, 
however,  did  not  remain  in  force  long  enough  to  make  it 
clear  what  would  have  been  its  permanent  effect  on  the 
woollen  manufacture.  Whatever  may  have  been  the 
start  made  in  these  few  years  in  making  finer  woollens, 
this  branch  of  the  industry,  as  is  generally  admitted,  well- 
nigh  disappeared  under  the  duties  of  1846.  The  tariff 
of  that  year  imposed  a  duty  of  30  per  cent,  on  woollen 
goods  in  general ;  but  flannels  and  worsteds  were  admitted 
at  25  per  cent.,  and  blankets  at  20  per  cent.  On  wool 
also  the  duty  was  30  per  cent.  Under  this  arrangement 
of  duties, — whether  or  not  in  consequence  of  it, — no 
development  took  place  in  those  branches  of  the  manu- 
facture which  needed  wool  that  was  subject  to  the  30  per 
cent.  duty.  The  finest  grades  of  woollens  were  not  made 
at  all.  But  the  manufacture  of  cloths  of  ordinary  quality 
(so-called  cassimeres  and  similar  goods),  and  that  of 
blankets  and  flannels,  continued  to  show  a  regular  growth. 
The  census  figures  are  not  of  much  value  as  accurate 
statistics,  but  there  seems  to  be  no  reason  for  doubting 
that  they  prove  a  steady  advance  in  the  woollen  manufac- 

JGrosvenor.      "Does  Protection  Protect  ?"  p.  147;    Introduction  to  the 
volume  of  the  "  Census  of  i860"  on  Manufactures,  p.  xxxiii. 


I46  THE    TARIFF,   183O-1860. 

ture  as  a  whole.1  The  growth  was  confined  mostly  to 
those  branches  which  used  domestic  wool ;  but  within 
these  there  was  not  only  increase,  but  development.  The 
methods  of  manufacture  were  improved,  better  machinery 
was  introduced,  and  new  kinds  of  goods  were  made.2  It 
is  a  striking  fact  that  the  very  high  protective  duties  which 
were  imposed  during  the  civil  war,  and  were  increased 
after  its  close,  have  not  brought  the  manufacture  of 
woollen  cloths  to  a  position  substantially  different  from 
that  which  had  been  attained  before  i860.  The  descrip- 
tion of  the  industry  which  the  spokesman  of  the  Asso- 


1  The  census  figures  on  the  woollen  manufacture  are  : 

Capital.          Value  of  Product.  Hands 

(In  million  dollars.)  Employed. 

184a    ....   I5.7           20.  21,342 

1850    ....   26.1           43.5  34,895 

i860    ....   3O.8           61.9  4I,36o 

The  figures  for  1850  are  exclusive  of  those  relating  to  blankets  ;  for  i860 
are  exclusive  of  those  relating  to  worsteds. 

2  "  Eighteen  hundred  and  fifty  saw  the  success  of  the  Crompton  loom  at 
Lowell  and  Lawrence,  on  which  were  made  a  full  line  of  Scotch  plaids  in  all 
their  beautiful  colorings,  as  well  as  star  twills,  half-diamonds.  *  *  *  Up  to 
that  time  fancy  cassimeres  had  been  made  largely  through  the  Blackstone 
Valley  (in  Rhode  Island)  on  the  Crompton  and  Tappet  looms,  as  made  by 
William  Crompton.  As  early  as  1846  the  Jacquard  was  used  at  Woon- 
socket  and  Blackstone.  From  1850  to  i860  fancy  cassimeres  made  a  rapid 
advance,  and  the  styles  ran  to  extremes  far  more  than  they  have  ever  since." 
Wade's  "  Fibre  and  Fabric,"  as  quoted  above,  p.  xlviii. 

According  to  the  official  "Statistical  Information  Relating  to  Certain 
Branches  of  Industry  in  Massachusetts,"  1855,  at  PP»  573—575,  woollen  goods 
were  made  in  1855  in  that  State  as  follows  : 

Broadcloth  to  the  value  of $     838,000 

Cassimeres  to  the  value  of 5,015,000 

Satinets  to  the  value  of 2,709,000 

Flannels  and  blankets  to  the  value  of  .     .     .     3,126,000 
Woollen  yarns  to  the  value  of 386,000 


THE    TARIFF,  183O-1860.  147 

ciation  of  Wool  Manufacturers  gave  in  1884  is,  in  the 
main,  applicable  to  its  state  in  i860.  "  The  woollen  manu- 
facture of  this  country  *  *  *  is  almost  wholly  absorbed  in 
production  for  the  masses.  Nine  tenths  of  our  card-wool 
fabrics  are  made  directly  for  the  ready-made  clothing 
establishments,  by  means  of  which  most  of  the  laboring 
people  and  all  the  boys  are  supplied  with  woollen  gar- 
ments. The  manufacture  of  flannels,  blankets,  and  ordi- 
nary knit  goods — pure  necessaries  of  life — occupies  most 
of  the  other  mills  engaged  in  working  up  carded  wool."  J 

Some  outlying  branches  of  the  woollen  manufacture, 
however,  showed  a  striking  advance  during  the  period  we 
are  considering.  The  most  noteworthy  of  these  is  the 
carpet  manufacture,  which  received  a  great  impetus  from 
the  application  of  newly-invented  machinery.  The  power- 
loom  for  weaving  ingrain  carpets  was  invented  in  1841 
by  Mr.  E.  B.  Bigelow,  and  the  more  complicated  loom 
for  weaving  Brussels  carpets  was  first  perfected  by  the 
same  inventive  genius  in    1848.2     The  new  machinery  at 

1  Mr.  John  L.  Hayes,  in  the  "  Bulletin  of  the  Association  of  Wool  Manu- 
facturers, "vol.  xiv.,  p.  116.  Mr.  Hayes  also  states  the  woollen  manufacture 
to  be  "  capable  of  producing  commodities  of  the  highest  luxury, — rich  car- 
pets, fine  upholsteries,  and  superfine  broadcloths  "  ;  but  his  description  of 
other  branches  of  the  industry  is  similar  to  that  quoted  in  the  text  on  card- 
wool  goods.  "  The  dress  goods  manufactured  are  fabricates  almost  exclu- 
sively for  the  million,  the  women  of  the  exclusive  and  fashionable  classes 
supplying  themselves  mainly  through  French  importations.  The  vast  car- 
pet manufacture  of  Philadelphia,  larger  than  in  any  city  of  Europe,  has  its 
chief  occupation  in  furnishing  carpets  for  the  more  modest  houses." 

3  See  the  sketch  of  Mr.  Bigelow's  career  up  to  1854,  in  "  Hunt's  Mer- 
chants Magazine,"  xxx.,  pp.  162   170. 


I48  THE    TARIFF,   183O-1860. 

once  put  the  manufacture  of  carpets  on  a  firm  basis  ;  and 
in  its  most  important  branches,  the  manufacture  of  ingrain 
and  Brussels  carpets,  it  became  independent  of  aid  from 
protective  duties.  A  similar  development  took  place  in 
the  manufacture  of  woollen  hose.  The  knitting-frame 
had  been  invented  in  England  as  early  as  the  sixteenth 
century,  but  had  been  worked  only  by  hand.  It  was  first 
adapted  to  machinery  in  the  United  States  in  1831,  and 
was  first  worked  by  machinery  at  Cohoes  in  New  York  in 
1832.  Other  inventions  followed;  and  a  prosperous  in- 
dustry developed,  which  supplied  the  entire  domestic 
market,  and  was  independent  of  protective  duties.1  On 
the  other  hand,  hardly  more  than  a  beginning  was  made 
before  the  civil  war  in  the  manufacture  of  worsted 
goods.  In  i860  there  were  no  more  than  three  consider- 
able factories  engaged  in  making  worsteds,  and  the  im- 
ports largely  exceeded  the  domestic  product.2     Some  ex- 

*See  the  account  of  the  history  of  the  manufacture  of  knit  goods  in  the 
"  Census  of  i860,"  volume  on  Manufactures,  pp.  xxxix.-xlv.  Compare  the 
brief  sketch  by  John  L.  Hayes  in  his  address  on  "  Protection  a  Boon  to  Con- 
sumers "  (Boston,  1867),  pp.  9-1 1.  No  attempt  had  been  made  before 
i860,  in  the  United  States  or  elsewhere,  to  make  knit  goods  of  cotton. 

2  See  the  Introduction  to  the  volume  on  Manufactures,  "Census  of 
i860,"  pp.  xxxvi.-xxxix. 

From  the  figures  of  production  in  the  "Census  of  i860,"  and  from  those 
of  imports  in  the  "  Report  on  Commerce  and  Navigation  "  for  the  fiscal  year 
1859-60,  we  have  the  materials  for  a  comparison  of  the  domestic  and  the 
foreign  supply  of  the  most  important  kinds  of  woollen  goods.     The  figures 

are  : 

Production,  Imports, 

i860.  1859-60. 
Woollens  generally  (including  flannels,  but  not 

blankets,  shawls,  or  yarns)          .         .         .         $43,500,000  $13,350,000 

Carpets 7,860,000  2,200,000 

Worsteds 3,700,000  12,300,000 


THE    TARIFF,   183O-1860.  1 49 

planation  of  this  state  of  things  may  be  found  in  the  com- 
paratively low  duty  of  25  per  cent,  on  worsteds  under  the 
tariff  of  1846.  Something  was  due  to  the  fact  that  the 
worsted  industry  in  England  not  only  was  long  estab- 
lished, but  was  steadily  improving  its  methods  and  ma- 
chinery. But  the  most  important  cause,  doubtless,  was 
the  duty  of  30  per  cent,  on  the  long-staple  combing  wool, 
which  then  was  needed  for  making  worsted  goods,  and 
which  physical  causes  have  prevented  from  being  grown 
to  any  large  extent  in  the  United  States. 

The  greatest  difference  between  the  woollen  industry 
as  it  stands  to-day  and  as  it  stood  before  i860  is  in  the 
large  worsted  manufacture  of  the  present,  which  has 
grown  up  almost  entirely  since  the  wool  and  woollens  act 
of  1867.  The  high  duties  undoubtedly  have  been  a  cause 
of  this  development,  or  at  least  were  so  in  the  beginning; 
but  a  further  and  important  cause  has  been  the  great  im- 
provement in  combing  machinery,  which  has  rendered  it 
possible  to  make  so-called  worsted  goods  from  almost  any 
grade  of  wool,  and  has  largely  done  away  with  the  dis- 
tinction between  woollen  and  worsted  goods.  The  result 
has  been  that  the  worsted  makers,  as  well  as  the  makers 
of  woollens,  have  been  able  to  use  domestic  wool ;  and  it 
is  in  the  production  of  goods  made  of  such  wool  that  the 
greatest  growth  of  recent  years  has  taken  place. 

The  tariff  act  of  1857  reduced  the  duty  on  woollens  to 
24  per  cent.,  but  much  more  than  made  up  for  this  by 
admitting  wool  practically  free  of  duty.     Wool   costing 


150  THE    TARIFF,  183O-1860. 

less  than  twenty  cents  at  the  place  of  exportation  was  ad- 
mitted free,  which  amounted  in  effect  to  the  exemption 
of  almost  all  wool  from  duty.  Moreover,  dyestuffs  and 
other  materials  were  admitted  free  or  at  low  rates.  The 
free  admission  of  wool  from  Canada,  under  the  reciprocity 
treaty  of  1854,  had  already  been  in  force  for  three  years.' 
The  remission  of  duties  on  these  materials  explains  the 
willingness  with  which  the  manufacturers  in  general  ac- 
ceded to  the  rearrangement  of  rates  in  1857.  ^n  i860, 
when  the  beginnings  were  made  in  re-imposing  higher 
protective  duties,  it  was  admitted  that  no  demand  for 
such  a  change  came  from  manufacturers.2  The  only  ex- 
ception was  in  the  case  of  the  iron-makers  of  Pennsyl- 
vania, who  did  not  share  in  the  benefits  of  the  free  list, 

1  Large  quantities  of  combing  wool  were  imported  from  Canada  under 
the  reciprocity  treaty,  and  were  used  in  making  worsteds  and  carpets. 
In  1866,  when  the  treaty  was  terminated,  and  high  duties  had  been  im- 
posed on  wool  in  general,  the  manufacturers  pleaded  hard  for  the  con- 
tinued free  admission  of  Canada  wool,  though  they  were  active  in  securing 
the  general  high  duties  of  1867  on  wool  and  woollens.  But  they  did  not 
succeed  in  getting  the  Canada  wools  free.  See  the  "  Statement  of  Facts 
Relative  to  Canada  Wools  and  the  Manufacture  of  Worsteds,"  made  by  the 
National  Association  of  Wool  Manufacturers,  Boston,  1866. 

9  Senator  Hunter,  who  had  been  most  active  in  bringing  about  the  pas- 
sage of  the  act  of  1857,  said,  during  the  debate  on  the  Morrill  bill  of  i860, 
"  Have  any  of  the  manufacturers  come  here  to  complain  or  to  ask  for  new 
duties?  If  they  have,  I  am  not  aware  of  it,  with  the  .exception,  perhaps,  of 
a  petition  or  two  presented  early  in  the  session  by  the  Senator  from  Con- 
necticut. Is  it  not  notorious  that  if  we  were  to  leave.it  to  the  manufacturers 
of  New  England  themselves,  to  the  manufacturers  of  hardware,  textile 
fabrics,  etc.,  there  would  be  a  large  majority  against  any  change?  Do 
we  not  know  that  the  woollen  manufacture  dates  its  revival  from  the  tariff 
of  1857,  which  altered  the  duties  on  wool?"  "  Congressional  Globe,"  1859 
-6o,  p.  301.     Cp.  the  note  to  p.  160,  below. 


THE    TARIFF,   183O-1860.  *  151 

and  who  opposed  the  reduction  of  1857.  So  far  as  the 
manufacture  of  woollen  goods  was  concerned,  the 
changes  of  1857,  as  might  have  been  expected,  served 
to  stimulate  the  industry;  and  it  grew  and  prospered 
during  the  years  immediately  preceding  the  civil  war. 
A  remission  of  duty  on  materials  obviously  operates 
in  the  first  instance  mainly  to  the  advantage  of  producers 
and  middle-men,  and  brings  benefit  to  consumers  only 
by  a  more  or  less  gradual  process.  The  experiment  of 
free  wool,  with  a  moderate  duty  on  woollens,  was  not  tried 
long  enough  to  make  certain  what  would  be  its  final  re- 
sults. It  is  not  impossible  that,  as  is  often  asserted  by 
the  opponents  of  duties  on  wool,  the  free  admission  of 
that  material  would  have  led  in  time  to  a  more  varied 
development  of  the  woollen  manufacture.  On  the  other 
hand,  it  may  be,  in  the  case  of  woollens  as  in  that  of  cot- 
tons, that  the  conditions  in  the  United  States  are  less 
favorable  for  making  the  finer  qualities  than  for  making 
those  cheaper  qualities  to  which  the  application  of  ma- 
chinery is  possible  in  greater  degree,  and  for  which,  at  the 
same  time,  the  domestic  wool  is  an  excellent  material. 
The  test  of  experience  under  conditions  of  freedom  could 
alone  decide  what  are  the  real  causes  of  the  comparatively 
limited  range  of  both  of  the  great  textile  industries ;  but 
it  is  not  improbable  that  general  causes  like  those  just 
mentioned,  rather  than  the  hampering  of  the  supply  of 
wool,  account  for  the  condition  of  the  woollen  manufac- 
ture.    However  that  may  be,  it  seems  certain  that  the 


152  THE    TARIFF,   183O-1860. 

practical  remission  of  duty  iri  1857,  whether  or  no  it  would 
in  the  long  run  have  caused  a  wide  development  of  the 
woollen  manufacture,  gave  it  for  the  time  being  a  distinct 
stimulus;  it  seems  to  have  had  but  little,  if  any,  effect  on 
the  prices  of  domestic  wool ' ;  and  it  must  have  tended  at 
the  least  to  cheapen  for  the  consumer  goods  made  in 
whole  or  in  part  of  foreign  wool. 

It  would  be  possible  to  extend  this  inquiry  farther,2  but 
enough  has  been  said  for  the  present  purpose.  In  the 
main,  the  changes  in  duties  have  had  much  less  effect  on 
the  protected  industries  than  is  generally  supposed. 
Their  growth  has  been  steady  and  continuous,  and  seems 
to  have  been  little  stimulated  by  the  high  duties  of  1842, 
and  little  checked  by  the  more  moderate  duties  of  1846 
and  1857.  Probably  the  duties  of  the  last-mentioned 
years,  while  on  their  face  protective  duties,  did  not  have 
in  any  important  degree  the  effect  of  stimulating  indus- 


1  The  price  per 

pound 

of  medium 

wool,  averaged  from 

quarterly  quota- 

tions,  was  : 

cts. 

cis. 

In  1852 

. 

38i 

In  1856 

45 

"  i853 

53 

"  1857 

.         46 

"  1854 

. 

4*1 

"  1858 

•         36 

"  1855 

38 

"  1859 
"  i860 

47 
•         47i 

The  prices  of  other  grades  moved  similarly.  The  panic  of  1857  caused  a 
fall  in  1858,  but  in  the  following  year  the  old  level  was  recovered.  The 
figures  are  based  on  the  tables  of  wool  prices  in  the  Bureau  of  Statistics' 
'  Report  on  Wool  and  Manufactures  of  Wool,"  1887,  p.  109.  The  move- 
ment of  wool  prices  abroad  during  these  years  seems  to  have  been  about 
the  same. 

■  In  the  Introduction  to  the  volume  on  Manufactures  of  the  "Census  of 
i860,"  to  which  reference  has  been  made  before,  there  is  a  useful  sketch  of 
the  history  of  various  branches  of  manufacture  up  to  that  date. 


THE    TARIFF,   183O-1860.  I  $3 

tries  that  could  not  have  maintained  themselves  under 
freedom  of  trade.  They  did  not  operate  as  strictly  pro- 
tective duties,  and  did  not  bring  that  extra  tax  on  con- 
sumers which  is  the  peculiar  effect  of  protective  duties. 
The  only  industry  which  presents  a  marked  exception  to 
these  general  conditions  is  the  manufacture  of  the  cruder 
forms  of  iron.  In  that  industry,  the  conditions  of  pro- 
duction in  the  eastern  part  of  the  United  States  were 
such  that  the  protective  duties  of  1842  caused  a  return 
to  old  processes,  and  an  enhanced  price  to  the  coun- 
try without  a  corresponding  gain  to  producers.  Even 
under  the  rates  of  1846  and  after  the  use  of  anthracite 
coal,  the  same  effect  can  be  seen,  though  in  less  degree. 

We  often  hear  it  said  that  any  considerable  reduction 
from  the  scale  of  duties  in  the  present  tariff,  whose  char- 
acter and  history  will  be  considered  in  the  following  pages, 
would  bring  about  the  disappearance  of  manufacturing 
industries,  or  at  least  a  disastrous  check  to  their  develop- 
ment. But  the  experience  of  the  period  before  i860  shows 
that  predictions  of  this  sort  have  little  warrant.  At 
present,  as  before  i860,  the  great  textile  manufactures 
are  not  dependent  to  any  great  extent  on  protective 
duties  of  the  kind  now  imposed.  The  direction  of  their 
growth  has  been  somewhat  affected  by  these  duties,  yet 
in  a  less  degree  than  might  have  been  expected.  It  is 
striking  that  both  under  the  system  of  high  protection 
which  has  been  maintained  since  the  civil  war,  and  under 
the  more  moderate  system  that  preceded  it,  the  cotton 


154  THE    TARIFF,   183O-1860. 

and  woollen  industries  have  been  kept  in  the  main  to 
those  goods  of  common  use  and  large  consumption  to 
which  the  economic  conditions  of  the  United  States 
might  be  expected  to  lead  them.  The  same  would 
doubtless  be  found  to  be  true  of  other  branches  of  manu- 
facture. In  some  cases,  no  doubt,  their  growth  has 
been  stimulated  beyond  the  point  at  which  they 
could  maintain  themselves  under  conditions  of  free- 
dom. The  making  of  pig-iron  in  the  eastern  part  of  the 
United  States  now  presents  in  some  degree  the  case  of 
an  industry  dependent  on  a  protective  duty.  Yet  the 
bulk  even  of  the  manufacture  of  crude  iron  would  not  be 
likely  to  disappear  under  duties  much  lower  than  the  pre- 
sent, or  even  in  entire  absence  of  duties.  In  general,  the 
extent  to  which  mechanical  branches  of  production  have 
been  brought  into  existence  and  maintained  by  the  pro- 
tective system  is  greatly  exaggerated  by  its  advocates  ; 
and  even  the  character  and  direction  of  their  development 
have  been  influenced  less  than,  on  grounds  of  general 
reasoning,  might  have  been  expected. 


THE  HISTORY  OF  THE  EXISTING  TARIFF. 


CHAPTER  I. 

THE    WAR    TARIFF. 

Every  one  has  heard  of  our  "  war  tariff  "  and  of  our 
"  war  taxes."  Every  one  knows  that  our  tariff  is  con- 
nected in  some  way  with  the  series  of  extraordinary  finan- 
cial measures  which  the  Rebellion  called  out.  But  few 
have  any  exact  knowledge  of  the  extent  to  which  our  ex- 
treme protective  system  is  due  to  the  war.  An  account 
of  the  way  in  which  the  tariff  was  put  into  its  present 
shape  will  show  how  the  exigencies  of  the  Civil  War 
caused  duties  to  be  greatly  increased  ;  how  these  high 
duties  were  retained  and  even  increased  in  an  unexpected 
and  indefensible  way ;  and  how  the  tariff,  as  it  now 
stands,  is  still,  in  the  main,  a  product  of  war  legislation. 
A  history  of  the  existing  tariff  is  simply  a  history  of  the 
way  in  which  the  war  duties  were  retained,  increased,  and 
systematized,  and  of  the  half-hearted  and  unsuccessful 
attempts  at  reduction  and  reform  which  have  been  made 
from  time  to  time. 

,155' 


156  HISTORY  OF  THE  EXISTING  TARIFF. 

Before  the  war  we  had  a  tariff  of  duties  which,  though 
The  tariff  not  arranged  completely  or  consistently  on  the 
before  the  principles  of  free  trade,  was  yet  very  moderate 
in  comparison  with  the  existing  system.  For 
about  fifteen  years  before  the  Rebellion  began,  duties 
on  imports  were  fixed  by  the  acts  of  1846  and  1857. 
The  act  of  1846  had  been  passed  by  the  Democratic 
party  with  the  avowed  intention  of  putting  into  oper- 
ation, as  far  as  was  possible,  the  principles  of  free 
trade.  This  intention,  it  is  true,  was  by  no  means  car- 
ried out  consistently.  Purely  revenue  articles,  like  tea 
and  coffee,  were  admitted  free  of  duty ;  and  on  the  other 
hand,  articles  like  iron  and  manufactures  of  iron,  cotton 
goods,  wool,  and  woollen  goods, — in  fact  most  of  the  im- 
portant articles  with  which  the  protective  controversy  has 
been  concerned, — were  charged  with  a  duty  of  thirty  per 
cent.  Other  articles  again,  like  steel,  copper,  lead,  were 
admitted  at  a  lower  duty  than  this,  not  for  any  reasons  of 
revenue,  but  because  they  were  not  then  produced  to  any 
extent  within  the  country,  and  because  protection  for 
them  in  consequence  was  not  asked.  Protection  was  by 
no  means  absent  from  the  act  of  1846;  and  the  rate  of 
thirty  per  cent.,  which  it  imposed  on  the  leading  articles, 
would  be  supposed,  in  almost  any  civilized  country,  to 
give  even  a  high  degree  of  protection.  Nevertheless,  the 
tariff  of  1846  was,  in  comparison  with  the  present  tariff,  a 
moderate  measure ;  and  a  return  to  its  rates  would  now 
be  considered  a  great  step  of  reform  by  those  who  are  op- 


THE  WAR  TARIFF. 


157 


posed  to  protective  duties.  The  act  of  1857  took  away 
still  more  from  the  restrictive  character  of  our  tariff  legis- 
lation. Congress,  it  may  be  remarked,  acted  in  1857  w^tn 
reasonable  soberness  and  impartiality,  and  without  being 
influenced  by  political  considerations.  The  maximum 
protective  duty  was  reduced  to  twenty-four  per  cent. ; 
many  raw  materials  were  admitted  free ;  and  the  level  of 
duties  on  the  whole  line  of  manufactured  articles  was 
brought  down  to  the  lowest  point  which  has  been  reached 
in  this  country  since  181 5.  It  is  not  likely  we  shall  see, 
for  a  great  many  years  to  come,  a  nearer  approach  to  the 
free-trade  ideal. 

The  country  accepted  the  tariff  acts  of  1846  and  1857, 
and  was  satisfied  with  them.  Except  in  the  years  imme- 
diately following  the  passage  of  the  former  act,  when 
there  was  some  attempt  to  induce  a  return  to  a  more 
rigid  protective  system,  agitation  on  the  tariff  ceased 
almost  entirely.  There  is  no  doubt  that  the  period  from 
1846  to  i860  was  a  time  of  great  material  prosperity,  in- 
terrupted, but  not  checked,  by  the  crisis  of  1857.  It 
would  be  going  too  far  to  assert  that  this  general  pros- 
perity was  due  chiefly  to  the  liberal  character  of  the  tariff. 
Other  causes  exercised  a  great  and  perhaps  a  predominant 
influence.  But  the  moderate  tariff  undoubtedly  was  one 
of  the  elements  that  contributed  to  the  general  welfare. 
It  may  be  well  to  add  that  prosperity  was  not  confined  to 
any  part  of  the  country,  or  to  any  branches  of  industry. 
Manufactures  in  general  continued  to  flourish  ;  and  the 


158  HISTORY  OF  THE  EXISTING  TARIFF. 

reduction  of  duties  which  was  made  in  1857  nac^  the  con- 
sent  and  approbation  of  the  main  body  of  the  manufac- 
turing class. 

The  crisis  of  1857  had  caused  a  falling  off  in  the  reve- 
nue from  duties.  This  was  made  the  occasion  for  a  reac- 
tion from  the  liberal  policy  of  1846  and  1857.  ^n  J86i 
the  Morrill  tariff  act  began  a  change  toward  a  higher  range 
of  duties  and  a  stronger  application  of  protection.  The 
Morrill  act  is  often  spoken  of  as  if  it  were  the  basis  of  the 
present  protective  system.  But  this  is  by  no  means  the 
The  Morrill  case-     The  tariff  act  of  1 861  was  passed  by  the 

tariff  act  House  of  Representatives  in  the  session  of 
1859-60,  the  session  preceding  the  election  of 
President  Lincoln.  It  was  passed,  undoubtedly,  with 
the  intention  of  attracting  to  the  Republican  party, 
at  the  approaching  Presidential  election,  votes  in  Penn- 
sylvania and  other  States  that  had  protectionist  lean- 
ings. In  the  Senate  the  tariff  bill  was  not  taken 
up  in  the  same  session  in  which  it  was  passed  in  the 
House.  Its  consideration  was  postponed,  and  it  was  not 
until  the  next  session — that  of  1860-61 — that  it  received 
the  assent  of  the  Senate  and  became  law.  It  is  clear  that 
the  Morrill  tariff  was  carried  in  the  House  before  any 
serious  expectation  of  war  was  entertained  ;  and  it  was 
accepted  by  the  Senate  in  the  session  of  1 861  without 
material  change.  It  therefore  forms  no  part  of  the  finan- 
cial legislation  of  the  war,  which  gave  rise  in  time  to  a 
series  of  measures  that   entirely  superseded  the  Morrill 


THE  WAR  TARIFF.  I  59 

tariff.  Indeed,  Mr.  Morrill  and  the  other  supporters  of 
the  act  of  1 86 1  declared  that  their  intention  was  simply 
to  restore  the  rates  of  1846.  The  important  change 
which  they  proposed  to  make  from  the  provisions  of  the 
tariff  of  1846  was  to  substitute  specific  for  ad-valor  cm 
duties.  Such  a  change  from  ad-valorem  to  specific 
duties  is  in  itself  by  no  means  objectionable ;  but  it  has 
usually  been  made  a  pretext  on  the  part  of  protectionists 
for  a  considerable  increase  in  the  actual  duties  paid. 
When  protectionists  make  a  change  of  this  kind,  they 
almost  invariably  make  the  specific  duties  higher  than  the 
ad-valorem  duties  for  which  they  are  supposed  to  be  an 
equivalent, — a  circumstance  which  has  given  rise  to  the 
common  notion,  of  course  unfounded,  that  there  is  some 
essential  connection  between  free  trade  and  ad-valorem 
duties  on  the  one  hand,  and  between  protection  and 
specific  duties  on  the  other  hand.  The  Morrill  tariff 
formed  no  exception  to  the  usual  course  of  things  in  this 
respect.  The  specific  duties  which  it  established  were  in 
many  cases  considerably  above  the  ad-valorem  duties  of 
1846.  The  most  important  direct  changes  made  by  the 
act  of  1 861  were  in  the  increased  duties  on  iron  and  on 
wool,  by  which  it  was  hoped  to  attach  to  the  Republican 
party  Pennsylvania  and  some  of  the  Western  States. 
Most  of  the  manufacturing  States  at  this  time  still  stood 
aloof  from  the  movement  toward  higher  rates. ' 

1  Mr.  Rice,  of  Massachusetts,  said  in  i860  :   "  The  manufacturer  asks  no 
additional  protection.     He  has  learned,  among  other  things,  that  the  great' 


l6o  HISTORY  OF  THE  EXISTING  TARIFF. 

Hardly  had  the  Morrill  tariff  act  been  passed  when 
Fort  Sumter  was  fired  on.  The  Civil  War  began.  The 
need  of  additional  revenue  for  carrying  on  the  great  strug- 
gle was  immediately  felt ;  and  as  early  as  the  extra  session 
of  the  summer  of  1861,  additional  customs  duties  were 
imposed.  In  the  next  regular  session,  in  December,  1861, 
a  still  further  increase  of  duties  was  made.  From  that 
time  till  1865  no  session,  indeed,  hardly  a  month  of  any 
session,  passed  in  which  some  increase  of  duties  on  im- 
ports was  not  made.  During  the  four  years  of  the  war 
every  resource  was  strained  for  carrying  on  the  great 
struggle.  Probably  no  country  has  seen,  in  so  short  a 
time,  so  extraordinary  a  mass  of  financial  legislation.  A 
huge  national  debt  was  accumulated;  the  mischievous 
expedient  of  an  inconvertible  paper  currency  was  resorted 
to ;  a  national  banking  system  unexpectedly  arose  from 
the  confusion  ;  an  enormous  system  of  internal  taxation 
was  created  ;  the  duties  on  imports  were  vastly  increased 
and  extended.  We  are  concerned  here  only  with  the 
change  in  the  tariff ;  yet  it  must  be  borne  in  mind  that 

est  evil,  next  to  a  ruinous  competition  from  foreign  sources,  is  an  excessive 
protection,  which  stimulates  a  like  ruinous  and  irresponsible  competition  at 
home," — Congress.  Globe,  1859-60,  p.  1S67.  Mr.  Sherman  said:  "When 
Mr.  Stanton  says  the  manufacturers  are  urging  and  pressing  this  bill,  he 
says  what  he  must  certainly  know  is  not  correct.  The  manufacturers  have 
asked  over  and  over  again  to  be  let  alone.  The  tariff  of  1857  is  the  manu- 
facturers' bill ;  but  the  present  bill  is  more  beneficial  to  the  agricultural  in- 
terest than  the  tariff  of  1857." — Ibid.,  p.  2053.  Cf.  Hunter's  Speech, 
Ibid.,  p.  3010.  In  later  years  Mr.  Morrill  himself  said  that  the  tariff  of 
1861  "  was  not  asked  for,  and  but  coldly  welcomed,  by  manufacturers,  who 
always  and  justly  fear  instability." — Congr.  Globe,  1869-70,  p.  3295. 


THE  WAR  TARIFF.  l6l 

these  changes  were  only  a  part  of  the  great  financial  meas- 
ures which  the  war  called  out.  Indeed,  it  is  impossible  to 
understand  the  meaning  of  the  changes  which  were  made 
in  the  tariff  without  a  knowledge  of  the  other  legislation 
that  accompanied  it,  and  more  especially  of  the  extended 
system  of  internal  taxation  which  was  adopted  at  the 
same  time.  To  go  through  the  various  acts  for  levying 
internal  taxes  and  imposing  duties  on  imports  is  not  neces- 
sary in  order  to  make  clear  the  character  and  bearing  of 
the  legislation  of  the  war.  It  will  be  enough  to  describe 
those  that  are  typical  and  important.  The  great  acts  of 
1862  and  1864  are  typical  of  the  whole  course  of  the  war 
measures;  and  the  latter  is  of  particular  importance, 
because  it  became  the  foundation  of  the  existing  tariff 
system. 

It  was  not  until  1862  that  the  country  began  to  appre- 
ciate how  great  must  be  the  efforts  necessary  to  suppress 
the  Rebellion,  and  that  Congress  set  to  work  in  earnest  to 
provide  the  means  for  that  purpose.  Even  in  1862  Con- 
gress  relied  more  on  selling  bonds  and  on  issuing  paper- 
money  than  on  immediate  taxation.  But  Tax  and 
two  vigorous  measures  were  resorted  to  for  tariff  acts  of 
taxing  the  people  immediately  and  directly. 
The  first  of  these  was  the  internal  revenue  act  of 
July  1,  1862.  This  established  a  comprehensive  system 
of  excise  taxation.  Specific  taxes  were  imposed  on 
the  production  of  iron  and  steel,  coal-oil,  paper,  leather, 
and     other    articles,      A    general    ad-valorem    tax    was. 


1 62  HISTORY  OF  THE  EXISTING  TARIFF, 

imposed  on  other  manufactures.  In  addition,  licenses 
were  required  in  many  callings.  A  general  income  tax 
was  imposed.  Railroad  companies,  steamboats,  express 
companies  were  made  to  pay  taxes  on  their  gross  receipts. 
Those  who  have  grown  to  manhood  within  the  last  fifteen 
years  find  it  difficult  to  imagine  the  existence  and  to  ap- 
preciate the  burden  of  this  heavy  and  vexatious  mass  of 
taxation ;  for  it  was  entirely  swept  away  within  a  few 
years  after  the  end  of  the  war. 

The  second  great  measure  of  taxation  to  which  Con- 
gress turned  at  this  time  was  the  tariff  act  of  July  14, 
1862.  The  object  of  this  act,  as  was  stated  by  Messrs. 
Morrill  and  Stevens,  who  had  charge  of  its  passage  in  the 
House,  was  primarily  to  increase  duties  only  to  such  an 
extent  as  might  be  necessary  in  order  to  offset  the  inter- 
nal taxes  of  the  act  of  July  1st.1  But  although  this  was  the 
chief  object  of  the  act,  protective  intentions  were  enter- 
tained by  those  who  framed  it,  and  were  carried  out. 
Both  Messrs.  Morrill  and  Stevens  were  avowed  protec- 
tionists, and  did  not  conceal  that  they  meant  in  many 
cases  to  help  the  home  producer.  The  increase  of  duties 
on  articles  which  were  made  in  this  country  was  therefore, 

1  Mr.  Morrill  said,  in  his  speech  introducing  the  tariff  bill  :  "It  will  be 
indispensable  for  us  to  revise  the  tariff  on  foreign  imports,  so  far  as  it  may 
be  seriously  disturbed  by  any  internal  duties,  and  to  make  proper  repara- 
tion. *  *  *  If  we  bleed  manufacturers,  we  must  see  to  it  that  the  proper 
tonic  is  administered  at  the  same  time." — Congr.  Globe,  1861-62,  p.  1196. 
Similarly  Mr.  Stevens  said  ;  "  We  intended  to  impose  an  additional  duty 
on  imports  equal  to  the  iax  which  had  been  put  on  the  domestic  articles.  It 
•was  done  by  way  of  compensation  to  domestic  manufacturers  against  foreign 
importers." — Ibid.,  p.  2979. 


THE  WAR  TARIFF,  1 63 

in  all  cases,  at  least  sufficient  to  afford  the  domestic  pro- 
ducers compensation  for  the  internal  taxes  which  they  had 
to  pay.  In  many  cases  it  was  more  than  sufficient  for  this 
purpose,  and  brought  about  a  distinct  increase  of  protec- 
tion. Had  not  the  internal  revenue  act  been  passed, 
affording  a  good  reason  for  some  increase  of  duties ;  had 
not  the  higher  taxation  of  purely  revenue  articles,  like 
tea  and  coffee,  been  a  justifiable  and  necessary  expedient 
for  increasing  the  government  income ;  had  not  the 
increase  even  of  protective  duties  been  quite  defensible  as 
a  temporary  means  for  the  same  end  ;  had  not  the  general 
feeling  been  in  favor  of  vigorous  measures  for  raising  the 
revenue ; — had  these  conditions  not  existed,  it  would  have 
been  very  difficult  to  carry  through  Congress  a  measure 
like  the  tariff  of  1862.  But,  as  matters  stood,  the  tariff 
was  easily  passed.  Under  cover  of  the  need  of  revenue 
and  of  the  intention  to  prevent  domestic  producers  from 
being  unfairly  handicapped  by  the  internal  taxes,  a  clear 
increase  of  protection  was  in  many  cases  brought  about. 
The  war  went  on ;  still  more  revenue  was  needed. 
Gradually  Congress  became  convinced  of  the  necessity  of 
resorting  to  still  heavier  taxation,  and  of  the  willingness 
of  the  country  to  pay  all  that  was  necessary  to  maintain 
the  Union.  Passing  over  less  important  acts,  we  have  to 
consider  the  great  measure  that  was  the  climax  of  the 
financial  legislation  of  the  war.  The  three  revenue  acts 
of  June  30,  1864,  practically  form  one  measure,  and  that 
probably   the   greatest   measure   of   taxation   which   the 


t6zj  history  of  the  existing  tariff. 

world  has  seen.  The  first  of  the  acts  provided  for  an 
enormous  extension  of  the  internal-tax  system  ;  the 
second  for  a  corresponding  increase  of  the  duties  on  im- 
ports ;  the  third  authorized  a  loan  of  $400,000,000. 

The  internal  revenue  act  was  arranged,  as  Mr.  David 
Internal  A.  Wells  has  said,  on  the  principle  of  the 
revenue  act,  Irishman  at  Donnybrook  fair;  "  Whenever  you 
see  a  head,  hit  it  ;  whenever  you  see  a  com- 
modity, tax  it."  Every  thing  was  taxed,  and  taxed 
heavily.  Every  ton  of  pig-iron  produced  was  charged  two 
dollars ;  every  ton  of  railroad  iron  three  dollars ;  sugar 
paid  two  cents  a  pound  ;  salt,  six  cents  a  hundred-weight. 
The  general  tax  on  all  manufactures  produced  was  five 
per  cent.  But  this  tax  was  repeated  on  almost  every 
article  in  different  stages  of  production.  Raw  cotton,  for 
instance,  was  taxed  two  cents  a  pound  ;  as  cloth,  it  again 
paid  five  per  cent.  Mr.  Wells  estimates  that  the  govern- 
ment in  fact  collected  between  eight  and  fifteen  per  cent, 
on  every  finished  product.  Taxes  on  the  gross  receipts  of 
railroad,  steamboat,  telegraph,  express,  and  insurance 
companies  were  levied,  or  were  increased  where  already  in 
existence.  The  license-tax  system  was  extended  to 
almost  every  conceivable  branch  of  trade.  The  income 
tax  was  raised  to  five  per  cent,  on  moderate  incomes,  and 
to  ten  per  cent,  on  incomes  of  more  than  $10,000. 
Tariff  act  of  The  tariff  act  of  1864,  passed  at  the  same  time 
1864.  with  the  internal  revenue  act,  also  brought  about 
a  great  increase  in  the  rates  of  taxation.     Like  the  tariff  act 


THE  WAR  TARIFF.  1 65 

of  1862,  that  of  1864  was  introduced,  explained,  amended, 
and  passed  under  the  management  of  Mr.  Morrill,  who 
was  Chairman  of  the  Committee  on  Ways  and  Means.  That 
gentleman  again  stated,  as  he  had  done  in  1862,  that  the 
passage  of  the  tariff  act  was  rendered  necessary  in  order 
to  put  domestic  producers  in  the  same  situation,  so  far  as 
foreign  competition  was  concerned,  as  if  the  internal  taxes 
had  not  been  raised.  This  was  one  great  object  of  the 
new  tariff ;  and  it  may  have  been  a  good  reason  for  bring- 
ing forward  some  measure  of  the  kind.  But  it  explains 
only  in  part  the  measure  which  in  fact  was  proposed  and 
passed.  The  tariff  of  1864  was  a  characteristic  result  of 
that  veritable  furor  of  taxation  which  had  become  fixed 
in  the  minds  of  the  men  who  were  then  managing  the 
national  finances.  Mr.  Morrill,  and  those  who  with  him 
made  our  revenue  laws,  seem  to  have  had  but  one  princi- 
ple :  to  tax  every  possible  article  indiscriminately,  and  to 
tax  it  at  the  highest  rates  that  any  one  had  the  courage  to 
suggest.  They  carried  this  method  out  to  its  fullest 
extent  in  the  tariff  act  of  1864,  as  well  as  in  the  tax  act  of 
that  year.  At  the  same  time  these  statesmen  were  pro- 
tectionists, and  did  not  attempt  to  conceal  their  protec- 
tionist leanings.  What  between  their  willingness  to  make 
every  tax  and  duty  as  high  as  possible  for  the  sake  of 
raising  revenue,  and  their  belief  that  high  import  duties 
were  beneficial  to  the  country,  the  protectionists  had  an 
opportunity  such  as  the  country  has  never  before  given 
them.      It  would  be  unfair  to  say  that  Mr.  Morrill,  Mr. 


1 66  HISTORY  OF  THE  EXISTING  TARIFF. 

Stevens,  and  the  other  gentlemen  who  shaped  the  revenue 
laws,  consciously  used  the  urgent  need  of  money  for  the 
war  as  a  means  of  carrying  out  their  protectionist  theories, 
or  of  promoting,  through  high  duties,  private  ends  for 
themselves  or  others.  But  it  is  certain  that  their  method 
of  treating  the  revenue  problems  resulted  in  a  most  unex- 
pected and  extravagant  application  of  protection,  and 
moreover,  made  possible  a  subservience  of  the  public  needs 
to  the  private  gains  of  individuals  such  as  unfortunately 
made  its  appearance  in  many  other  branches  of  the  war 
administration.  Every  domestic  producer  who  came  be- 
fore Congress  got  what  he  wanted  in  the  way  of  duties. 
Protection  ran  riot ;  and  this,  moreover,  not  merely  for 
the  time  being.  The  whole  tone  of  the  public  mind 
toward  the  question  of  import  duties  became  distorted. 
Not  only  during  the  war,  but  for  several  years  after  it,  all 
feeling  of  opposition  to  high  import  duties  almost  entirely 
disappeared.  The  habit  of  putting  on  as  high  rates  as 
any  one  asked  had  become  so  strong  that  it  could  hardly 
be  shaken  off ;  and  even  after  the  war,  almost  any  increase 
of  duties  demanded  by  domestic  producers  was  readily 
made.  The  war  had  in  many  ways  a  bracing  and  enno- 
bling influence  on  our  national  life  ;  but  its  immediate 
effect  on  business  affairs,  and  .on  all  legislation  affecting 
moneyed  interests,  was  demoralizing.  The  line  between 
public  duty  and  private  interests  was  often  lost  sight  of 
by  legislators.  Great  fortunes  were  made  by  changes  in 
legislation  urged  and  brought  about  by  those  who  were 


THE  WAR  TARIFF.  l6j 

benefited  by  them ;  and  the  country  has  seen  with  sorrow 
that  the  honor  and  honesty  of  public  men  did  not  remain 
undefiled.  The  tariff,  like  other  legislation  on  matters  of 
finance,  was  affected  by  these  causes.  Schemes  for  money- 
making  were  incorporated  in  it,  and  were  hardly  ques- 
tioned by  Congress.  When  more  enlightened  and 
unselfish  views  began  to  make  their  way,  and  protests 
were  made  against  the  abuses  and  excessive  duties  of  the 
war  period,  these  had  obtained,  as  we  shall  see,  too  strong 
a  hold  to  be  easily  shaken  off. 

Such  were  the  conditions  under  which  the  tariff  act  of 
1864  was  passed.  As  in  1862,  three  causes  were  at  work: 
in  the  first  place,  the  urgent  need  of  revenue  for  the  war ; 
in  the  next,  the  wish  to  offset  the  internal  taxes  imposed 
on  domestic  producers ;  and  finally,  the  protectionist 
leanings  of  those  who  managed  our  financial  legislation. 
These  causes  made  possible  a  tariff  act  which  in  ordinary 
times  would  have  been  summarily  rejected.  It  raised 
duties  greatly  and  indiscriminately, — so  much  so,  that  the 
average  rate  on  dutiable  commodities,  which  had  been 
37.2  per  cent,  under  the  act  of  1862,  became  47.06  per 
cent,  under  that  of  1864.  It  was  in  many  ways  crude 
and '  ill-considered ;  it  established  protective  duties  more 
extreme  than  had  been  ventured  on  in  any  previous  tariff 
act  in  our  country's  history ;  it  contained  flagrant  abuses, 
in  the  shape  of  duties  whose  chief  effect  was  to  bring 
money  into  the  pockets  of  private  individuals. 

Nothing  more  clearly  illustrates  the  character  of  this 


1 68  HISTORY  OF  THE  EXISTING  TARIFF. 

piece  of  legislation,  and  the  circumstances  which  made  its 
enactment  a  possibility,  than  the  public  history  of  its 
passage  through  Congress.  The  bill  was  introduced  into 
the  House  on  June  2d  by  Mr.  Morrill.  General  debate 
on  it  was  stopped  after  one  day.  The  House  then  pro- 
ceeded to  the  consideration  of  amendments.  Almost 
without  exception  amendments  offered  by  Mr.  Morrill 
were  adopted,  and  all  others  were  rejected.  After  two 
days  had  been  given  in  this  way  to  the  amendments,  the 
House,  on  June  4th,  passed  the  bill.  In  the  Senate  much 
the  same  course  was  followed.  The  consideration  of  the 
bill  began  on  June  1 6th;  it  was  passed  on  the  following 
day.  That  is  to  say,  five  days  in  all  were  given  by  the 
two  houses  to  this  act,  which  was  in  its  effects  one  of  the 
most  important  financial  measures  ever  passed  in  the 
United  States.  The  bill  was  accepted  as  it  came  from 
the  Committee  on  Ways  and  Means,  and  was  passed  practi- 
cally without  debate  or  examination.  No  pretence  could 
be  made  of  any  detailed  or  effective  criticism  by  Congress. 
The  necessity  of  the  situation,  the  critical  state  of  the 
country,  the  urgent  need  of  revenue,  may  have  justified 
this  haste,  which,  it  is  safe  to  say,  is  unexampled  in  the 
The  tariff  history  of  civilized  countries.  But  surely  trfere 
of  1864  is  the  can  De  no  excuse  for  making  a  measure  passed 

basis  of        .        .  .  111 

the  existing  in  manner  and  under  these  circumstances 

tariff.       the    foundation    of   the    permanent    economic 

policy   of   an   enlightened    people.      And   yet   this    has 

been   the   case,  and  it   is  the  central  point  in   the   his- 


THE  WAR  TARIFF.  1 69 

tory  of  tariff  legislation  of  the  last  twenty-five  years. 
The  tariff  act  of  1864  is  the  basis  of  the  existing  sys- 
tem of  import  duties.  Great  changes  have  indeed  been 
made  since  the  war,  as  will  be  seen  in  the  following 
chapters.  But  on  almost  all  the  articles  with  which  the 
protective  controversy  is  concerned,  rates  are  still  those 
of  the  tariff  act  of  1864.  This  is  said  without  taking  into 
account  the  last  tariff  act,  that  of  1883;  and  it  will  be 
seen  at  a  subsequent  point  that  the  changes  made  by  the 
act  of  1883  were  not  of  sufficient  importance  to  affect  the 
substantial  correctness  of  the  general  statement.  In  re- 
gard to  the  duties  as  they  stood  before  1883,  it  is  literally 
true,  in  regard  to  almost  all  protected  articles,  that  the 
tariff  act  of  1864  remained  in  force  for  twenty  years  with- 
out reductions.  Any  one  who  will  glance  over  the  margin 
of  those  sections  of  the  Revised  Statutes  of  the  United 
States  which  refer  to  the  tariff,  can  see  how  large  a  pro- 
portion of  the  rates  there  enumerated  date  from  the  year 
1864;  and  if  he  notes  the  occasional  protective  duties  set 
down  in  the  Revised  Statutes  as  having  been  fixed  by 
acts  passed  later  than  1864,  he  will  find  that  these  almost 
invariably  show,  not  a  reduction,  but  an  increase  over  the 
rates  of  the  war  tariff.  ' 

1  In  Heyl's  "  Import  Duties  "  the  reader  will  find  the  act  of  1864 
printed  in  full,  those  parts  which  are  no  longer  in  force  being  distinguished 
by  small  type,  and  he  will  be  surprised  to  find  (in  any  edition  before  1883, 
how  few  sections  of  the  act  are  set  down  as  obsolete.     See,  e.g.,  edition  of 

i879»  PP-  57-73. 

It  should  be  said  that  the  act  of  1864  was  not  in  form  a  general  act, 
repealing  all  previous  enactments.     It  left  in  force,  for  instance,  all  pro- 


\yO  HISTORY  OF  THE  EXISTING  TARIFF. 

How  this  maintenance  of  the  war  duties  came  about, 
will  be  the  subject  of  the  following  chapters. 

visions  of  the  Morrill  act  of  1861  and  of  the  tariff  act  of  1862  which  were 
not  expressly  changed  by  it.  But  it  affected  so  completely  and  with  so  few 
exceptions  the  whole  range  of  import  duties,  and  especially  the  protective 
duties,  that  it  was  practically  a  new  general  tariff. 


CHAPTER  II. 

THE  FAILURE  TO  REDUCE  THE  TARIFF  AFTER  THE  WAR. 

When  the  war  closed,  the  revenue  acts  which  had  been 
hastily  passed  during  its  course  constituted  a  chaotic  mass. 
Congress  and  the  Secretary  of  the  Treasury  immediately 
set  to  work  to  bring  some  order  into  this  chaos,  by  fund- 
ing and  consolidating  the  debt,  by  contracting  the  paper 
currency,  and  by  reforming  and  reducing  the  internal 
taxes.1  The  years  between  1865  and  1870  are  full  of  dis- 
cussions and  enactments  on  taxation  and  finance.  On 
some  parts  of  the  financial  system,  in  regard  to  which 
there  was  little  disagreement,  action  was  prompt  and 
salutary.  The  complicated  mass  of  internal  taxes  was 
felt  to  be  an  evil  by  all.  It  bore  heavily  and  vexatiously 
on  the  people ;  and  Congress  proceeded  to  sweep  it' 
away  with  all  possible  speed.  As  soon  as  the  immense 
floating  debt  had   been  funded,  and   the  extent  of   the 

1  Those  who  wish  to  get  some  knowledge  of  the  confused  character  of  the 
financial  legislation  called  out  by  the  war,  are  referred  to  Mr.  David  A. 
Wells's  excellent  essay  on  "  The  Recent  Financial  Experiences  of  the 
United  States  "  (1872).  Those  who  wish  to  study  more  in  detail  the  course 
of  events  after  the  war  should  read  Mr.  Wells's  reports  as  Commissioner  of 
the  Revenue',  of  1867,  1868,  1869,  and  1870. 

171 


J ?2  HISTORY  OF  THE  EXISTING  TARIFF. 

annual  needs  of  the  government  became  somewhat  clear, 

Congress  set  to  work  at  repealing  and  modifying  the  excise 

laws.      It  is  not  necessary  to  enumerate  the  various  steps 

......        by  which  the   internal-tax  system    was   modi- 

Abohtion  J 

of  the      fied.      Year  after  year  acts  for  reducing  and 

internal  taxes  abolishing  internal  taxes  were  passed.    By  1872 
1866-1872.     ...... 

all  those  which  had  any  connection  with   the 

subject  of  our  investigation — the  protective  duties — 
had  disappeared.1  The  taxes  on  spirits  and  beer, 
those  on  banks,  and  a  few  comparatively  unimportant 
taxes  on  matches,  patent  medicines,  and  other  articles 
were  retained.  But  all  those  taxes  which  bore  heavily  on 
the  productive  resources  of  the  country — those  taxes 
in  compensation  for  which  higher  duties  had  been  im- 
posed in  1862  and  1864 — were  entirely  abolished. 

Step  by  step  with  this  removal  of  the  internal  taxes,  a 
reduction  of  import  duties  should  have  taken  place  ;  at 
the  least,  a  reduction  which  would  have  taken  off  those 
additional  duties  that  had  been  put  on  in  order  to  offset 
the  internal  taxes.  This,  however,  Congress  hesitated  to 
undertake.  We  have  seen  in  the  preceding  chapter  th::. 
the  opportunity  given  by  the  war  system  of  taxation  was 
seized  by  the  protectionists  in  order  to  carry  out  their 
wishes.  It  would  not  be  easy  to  say  whether  at  the  time 
the  public  men  who  carried  out  this  legislation  meant  the 
new  system  of  import  duties  to  be  permanent.  Certainly 
the  war  methods  of  finance  as  a  whole  were  not  meant  to 

1  The  most  important  acts  for  reducing  the  internal  taxes  were  those  of  July 
II,  1866  ;  March  2,  1867  ;  Marcher,  1868  ;  July  14,  1870  ;  June  6,  1872. 


REDUCTION   OF  THE  TARIFF.  1 73 

remain  in  force  for  an  unlimited  time.  Some  parts  of  the 
tariff  were  beyond  doubt  intended  to  be  merely  tem- 
porary ;  and  the  reasonable  expectation  was  that  the  pro- 
tective duties  would  sooner  or  later  be  overhauled  and 
reduced.  Had  the  question  been  directly  put  to  almost 
any  public  man,  whether  the  tariff  system  of  the  war  was 
to  be  continued,  the  answer  would  certainly  have  been  in 
the  negative, — that  in  due  time  the  import  duties  were  to 
be  lowered.1  During  the  years  of  confusion  immediately 
after  the  war  little  was  attempted  ;  but  soon  a  disposition 
to  affect  some  reform  in  the  incongruous  mass  of  duties 
began  to  be  shown.  Each  year  schemes  for  reduction  and 
reform  were  brought  forward.  Commissions  were  ap- 
pointed, bills  were  elaborated  and  considered ;  but  the 
reform  was  put  off  from  year  to  year.  The  pressure  from 
the  interested  domestic  producers  was  strong ;  the  power 
of  the  lobby  was  great  ;  the  overshadowing  problem  of 
reconstruction  absorbed  the  energies  of  Congress.    Gradu- 

1  As  late  as  1S70,  Mr.  Morrill  said  :  "  For  revenue  purposes,  and  not 
solely  for  protection,  fifty  per  cent,  in  many  instances  has  been  added  to  the 
tariff  [during  the  war]  to  enable  our  home  trade  to  bear  the  new  but  indis- 
pensable burdens  of  internal  taxation.  Already  we  have  relinquished  most 
of  such  taxes.  So  far,  then,  as  protection  is  concerned  *  *  *  we  might 
safely  remit  a  percentage  of  the  tariff  on  a  considerable  share  of  our  foreign 
importations.  *  *  *  It  is  a  mistake  of  the  f fiends  of  a  sound  tariff  to 
insist  on  the  extreme  rates  imposed  during  the  war,  if  less  will  raise  the 
necessary  revenue.  *  *  *  Whatever  percentage  of  duties  was  imposed 
on  foreign  goods  to  cover  internal  taxation  on  home  manufactures,  should 
not  now  be  claimed  as  the  lawful  prize  of  protection,  when  such  taxes  have 
been  repealed.  There  is  no  longer  an  equivalent." — Congress.  Globe,  1869- 
70,  p.  3295.  These  passages  occur  at  the  end  of  a  long  speech  in  favor  of 
the  principle  of  protection. 


174  HISTORY  OF  THE  EXISTING  TARIFF. 

ally,  as  the  organization  of  industry  in  the  country 
adapted  itself  more  closely  to  the  tariff  as  it  was,  the  feel- 
ing that  no  reform  was  needed  obtained  a  strong  hold.  Many 
industries  had  grown  up,  or  had  been  greatly  extended, 
under  the  influence  of  the  war  legislation.  As  that  legis- 
lation continued  unchanged,  still  more  capital  was  em- 
barked in  establishments  whose  existence  or  prosperity  was 
in  some  degree  dependent  on  its  maintenance.  All  who 
were  connected  with  establishments  of  this  kind  asserted 
that  they  would  be  ruined  by  any  change.  The  business 
world  in  general  tends  to  be  favorable  to  the  maintenance 
of  things  as  they  are.  The  country  at  large,  and  especially 
those  parts  of  it  in  which  the  protected  industries  were 
concentrated,  began  to  look  on  the  existing  state  of 
things  as  permanent.  The  extreme  protective  system, 
which  had  been  at  the  first  a  temporary  expedient  for 
aiding  in  the  struggle  for  the  Union,  adopted  hastily  and 
without  any  thought  of  deliberation,  gradually  became 
accepted  as  a  permanent  institution.  From  this  it  was  a 
short  step,  in  order  to  explain  and  justify  the  existing 
state  of  things,  to  set  up  high  protection  as  a  theory  and 
a  dogma.  The  restraint  of  trade  with  foreign  countries, 
by  means  of  import  duties  of  forty,  fifty,  sixty,  even  a 
hundred  per  cent.,  came  to  be  advocated  as  a  good  thing 
in  itself  by  many  who,  under  normal  circumstances,  would 
have  thought  such  a  policy  preposterous.  Ideas  of  this 
kind  were  no  longer  the  exploded  errors  of  a  small  school 
of  economists ;  they  became  the  foundation  of  the  policy 


REDUCTION  OF  THE  TARIFF.  I?$ 

of  a  great  people.  Then  the  mass  of  restrictive  legislation 
which  had  been  hurriedly  piled  up  during  the  war,  was 
strengthened  and  completed,  and  made  into  a  firm  and 
consistent  edifice.  On  purely  revenue  articles,  such  as 
are  not  produced  at  all  in  the  country,  the  duties  were  al- 
most entirely  abolished.  A  few  raw  materials,  it  is  true, 
were  admitted  at  low  rates,  or  entirely  free  of  duty.  But 
these  were  exceptions,  made  apparently  by  accident.  As 
a  rule,  the  duties  on  articles  produced  in  the  country,  that 
is,  the  protective  duties,  were  retained  at  the  war  figures, 
or  raised  above  them.  The  result  was  that  the  tariff 
gradually  became  exclusively  and  distinctly  a  protective 
measure  ;  it  included  almost  all  the  protective  duties  put 
on  during  the  war,  added  many  more  to  them,  and  no 
longer  contained  the  purely  revenue  duties  of  the  war. 

We  turn  now  to  a  somewhat  more  detailed  account  of 
the  process  by  which  the  reform  of  the  tariff  was  pre- 
vented. To  give  a  complete  account  of  the  various  tariff 
acts  which  were  passed,  or  of  the  tariff  bills  which  were 
pressed  without  success,  is  needless.  Every  session  of 
Congress  had  its  array  of  tariff  acts  and  tariff  bills  ;  and 
we  may  content  ourselves  with  an  account  of  those  which 
are  typical  of  the  general  course  of  events.  Of  the  at- 
tempts at  reform  which  were  made  in  the  years  imme- 
diately after  the  war,  the  fate  of  the  tariff  Unsuccessfui 
bills  of  1867  is  characteristic.  Two  proposals  tariff  bill 
were  then  before  Congress:  one  a  bill  passed  °  x  7' 
by  the  House  at  the   previous  session  ;    the   other  a  bill 


176  HISTORY  OF  THE  EXISTING  TARIFF. 

prepared  by  Mr.  David  A.  Wells,  then  Special  Com- 
missioner of  the  Revenue,  and  heartily  approved  by 
Secretary  McCulloch.  The  great  rise  in  prices  and  in 
money  wages  in  these  years,  and  the  industrial  embar- 
rassment which  followed  the  war,  had  caused  a  demand 
for  still  higher  import  duties;  the  House  bill  had  been 
framed  to  answer  this  demand,  and  proposed  a  general 
increase.  Mr.  Wells  recommended  a  different  policy. 
He  had  not  then  become  convinced  of  the  truth  of  the 
principles  of  free  trade  ;  but  he  had  clearly  seen  that  the 
indiscriminate  protection  which  the  war  tariff  gave,  and 
which  the  House  bill  proposed  to  augment,  could  not  be 
beneficial.  His  bill  reduced  duties  on  raw  materials,  such 
as  scrap-iron,  coal,  lumber,  hemp,  and  flax  ;  and  it  either 
maintained  without  change  or  slightly  lowered  the  duties 
on  most  manufactured  articles.  A  careful  rearrangement 
was  at  the  same  time  made  in  the  rates  on  spices,  chemi- 
cals, dyes,  and  dye-woods, — articles  of  which  a  careful 
and  detailed  examination  is  necessary  for  the  determina- 
tion of  duties,  and  in  regard  to  which  the  tariff  contained 
then,  as  it  does  now,  much  that  was  arbitrary  and  inde- 
fensible. Mr.  Wells's  bill,  making  these  reforms,  gained 
the  day  over  the  less  liberal  House  bill.  It  was  passed  by 
the  Senate,  as  an  amendment  to  the  House  bill,  by  a  large 
majority  (27  to  10).  In  the  House  there  was  also  a  ma- 
jority in  its  favor;  but  unfortunately  a  two-thirds  majori- 
ty was  necessary  in  order  to  suspend  the  rules  and  bring 
it  before  the  House.     The  vote  was  106  to  64  in  favor  of 


REDUCTION  OF  THE  TARIFF.  IJJ 

the  bill ;  the  two-thirds  majority  was  not  obtained,  and 
it  failed  to  become  law.  The  result  was  not  only  that  no 
general  tariff  bill  was  passed  at  this  session,  but  the  course 
of  tariff  reform  for  the  future  received  a  regrettable  check. 
Had  Mr.  Wells's  proposals  been  enacted,  it  is  not  unlikely 
that  the  events  of  the  next  few  years  would  have  been 
very  different  from  what  in  fact  they  were.  It  would  be 
too  much  to  say  that  these  proposals  looked  forward  to 
still  further  steps  in  the  way  of  moderating  the  protective 
system,  or  that  their  favorable  reception  showed  any  dis- 
tinct tendency  against  protection.  There  was  at  that 
time  no  free-trade  feeling  at  all,  and  Mr.  Wells's  bill  was 
simply  a  reform  measure  from  the  protectionist  point  of 
view.  But  the  vote  on  it  is  nevertheless  significant  of  the 
fact  that  the  extreme  and  uncompromising  protective 
spirit  was  not  then  all-powerful.  The  bill,  it  is  true,  had 
been  modified  in  a  protectionist  direction  in  various  ways 
before  it  came  to  be  voted  on  ;  but  the  essential  reductions 
and  reforms  were  still  contained  in  it  and  the  votes  show 
that  the  protectionist  feeling  was  far  from  being  solidified 
at  that  time  to  the  extent  that  it  came  to  be  a  few  years 
later.  Had  the  bill  of  1867  been  passed,  the  character  of 
recent  tariff  legislation  might  have  been  very  different. 
A  beginning  would  have  been  made  in  looking  at  the 
tariff  from  a  sober  point  of  view,  and  in  reducing  duties 
that  were  clearly  pernicious.  The  growing  habit  of  look- 
ing on  the  war  rates  as  a  permanent  system  might  have 
been  checked,  and  the  attempts  at  tariff  reform  in  subse- 


•  178  HISTORY  OF  THE  EXISTING  TARIFF. 

quent  years  would  probably  have  found  stronger  support 
and  met  with  less  successful  opposition.  From  this  time 
till  the  tariff  act  of  1883  was  passed,  there  was  no  general 
tariff  bill  which  had  so  good  a  chance  of  being  passed. 
The  failure  of  the  attempt  of  1867  encouraged  the  protec- 
tionists in  fighting  for  the  retention  of  the  war  duties 
wherever  they  could  not  secure  an  increase  over  and 
above  them  ;  and  in  this  contest  they  were,  with  few 
exceptions,  successful.1 

Of  the  legislation  that  was  in  fact  carried  out,  the  act  of 
Act  of  1870.  1870  is  a  fair  example.  It  was  passed  in  compli- 
ance with  the  demand  for  a  reduction  of  taxes  and  for  tar- 
iff reform,  which  was  at  that  time  especially  strong  in  the 
West,  and  was  there  made  alike  by  Republicans  and  Dem- 
ocrats.2 The  declared  intention  of  those  who  framed  it  and 

1  Mr.  Wells's  bill  and  the  rates  proposed  in  the  House  bill  may  be  found 
in  his  report  for  1866-67,  pp.  235-290.  The  principle  of  "  enlightened 
protection  "  on  which  he  proceeded  is  stated  on  p.  34.  At  this  time  Mr. 
Wells  was  still  a  protectionist  ;  it  was  not  until  he  prepared  his  report  for 
1868-69  that  he  showed  himself  fully  convinced  of  the  unsoundness  of  the 
theory  of  protection.  His  able  investigations  and  the  matter-of-fact  tone  of 
all  of  his  reports  gave  much  weight  to  his  change  of  opinion,  and  caused  it 
to  strengthen  greatly  the  public  feeling  in  favor  of  tariff  reform. 

3  President  Garfield  (then  Representative)  said  in  1870  :  "  After  studying 
the  whole  subject  as  carefully  as  I  am  able,  I  am  firmly  of  the  opinion  that 
the  wisest  thing  that  the  protectionists  in  this  House  can  do  is  to  unite  on  a 
moderate  reduction  of  duties  on  imported  articles.  *  *  *  If  I  do  not 
misunderstand  the  signs  of  the  times,  unless  we  do  this  ourselves,  prudently 
and  wisely,  we  shall  before  long  be  compelled  to  submit  to  a  violent  reduc- 
tion, made  rudely  and  without  discrimination,  which  will  shock,  if  not 
shatter,  all  our  protected  industries." — Young's  Report,  p.  clxxii.  It  h 
worthy  of  remark  that  Mr.  Garfield  had  also  supported  earnestly  the  unsuc- 
cessful bill  of  1867.  He  had  appealed  to  his  party  to  vote  so  as  to  make  up 
the  two-thirds  majority  necessary  for  its  consideration,  telling  them  that  later 


REDUCTION  OF  THE  TARIFF.  1 79 

had  charge  of  it  in  Congress  was  to  reduce  taxation.  But 
the  reductions  made  by  it  were,  almost  without  exception, 
on  purely  revenue  articles.  The  duties  on  tea,  coffee,  wines, 
sugar,  molasses,  and  spices  were  lowered.  Other  articles 
of  the  same  kind  were  put  on  the  free  list.  The  omy 
noteworthy  reduction  in  the  protective  parts  of  the  tariff 
was  in  the  duty  on  pig-iron,  which  went  down  from  $9  00 
to  $7.00  a  ton.  On  the  other  hand,  a  very  considerable 
increase  of  duties  was  made  on  a  number  of  protected 
articles — on  steel  rails,  on  marble,  on  nickel,  and  on  other 
articles.1  We  shall  have  occasion  to  refer  to  some  of  these 
indefensible  exactions  in  another  connection.*  At  present 
we  are  concerned  only  with  the  reductions  of  duty  which 
were  carried  out.  Among  the  protective  duties  the  lower- 
ing of  that  on  pig-iron  was  the  only  one  of  importance. 
This  change,  indeed,  might  well  have  been  made  at  an 
earlier  date,  for  the  internal  tax  of  $2.00  on  pig-iron  (in 
compensation  for  which  the  tariff  rate  had  been  raised  to 
$9.00  in  1864)  had  been  taken  off  as  early  as  1866.3 

The  only  effort  to  reform  the  protective  parts  of  the 
tariff    Avhich    had   any  degree    of    success,   was   made    in 

they  might  "  make  up  their  record  "  by  voting  against  it. — Congr.  Globe, 
1866-67,  pp.  1657,  1658. 

1  An  increase  in  the  duties  on  bar-iron  was  also  proposed  in  the  bill  as 
reported  by  the  Committee  on  Ways  and  Means  ;  but  this,  fortunately,  was 
more  than  could  be  carried  through.  See  the  speeches  of  Messrs.  Brocks 
(Congr.  Globe,  1869-70,  part  7,  appendix,  pp.  163-167)  and  Allison  {ibid., 
p.  192  et  seq.)   which  protest  against  the  sham  reductions  of  the  bill. 

2  See  chapter  iii. 

3  See  the  list  of  reductions  made  by  the  act  of  1870  in  Young's  Report,  p. 
clxxvii. 


180  HISTORY  OF  THE  EXISTING  TARIFF. 

1872.  The  tactics  of  the  proctectionists  in  that  year 
illustrate  strikingly  the  manner  in  which  attempts  at 
tariff  reform  have  been  frustrated  ;  and  the  history  of 
the  attempt  is,  from  this  point  of  view,  so  instructive 
that  it  may  be  told  somewhat  in  detail.     The  situation 

Situation  in  in  1 872  was  in  many  ways  favorable  for  tariff 
1872.  reform.  The  idea  of  tax  and  tariff  reform 
was  familiar  to  the  people  at  large.  It  was  not  as  yet 
openly  pretended  that  the  protective  duties  were  to 
remain  indefinitely  as  they  had  been  fixed  in  the  war. 
The  act  of  1870  had  made  a  concession  by  the  reduc- 
tion on  pig-iron ;  further  changes  of  the  same  kind  were 
expected  to  follow.  Moreover,  the  feeling  in  favor  of 
tariff  reform  was  in  all  these  years  particularly  strong 
in  the  West.  So  strong  was  it  that,  as  has  already  been 
noted,  it  overrode  party  differences,  and  made  almost  all 
the  Western  Congressmen,  whether  Democrats  or  Repub- 
licans, act  in  favor  of  reductions  in  the  tariff.  The  cause 
of  this  state  of  things  is  to  be  found  in  the  economic  con- 
dition of  the  country  from  the  end  of  the  war  till  after  the 
panic  of  1873.  The  prices  of  manufactured  goods  were 
then  high,  and  imports  were  large.  On  the  other  hand, 
exports  were  comparatively  small  and  the  prices  of  grain 
and  provisions  low.  The  agricultural  population  was 
far  from  prosperous.  The  granger  movement,  and  the 
agitation  against  the  railroads,  were  one  result  of  the 
depressed  conation  of  the  farmers.  Another  result  was 
the  strong  feeling  against  the  tariff,  which  the  farmers 


REDUCTION  OF  THE  TARIFF.  l8l 

rightly  believed  to  be  among  the  causes  of  the  state  of 
things  under  which  they  were  suffering.1  Their  represen- 
tatives in  Congress  were  therefore  compelled  to  take  a 
stand  in  favor  of  lowering  the  protective  duties.  The 
Western  members  being  nearly  all  agreed  on  this  subject, 
Congress  contained  a  clear  majority  in  favor  of  a  reform 
in  the  tariff.  Party  lines  at  that  time  had  little  influence 
on  the  protective  controversy,  and,  although  both  houses 
were  strongly  Republican,  a  strong  disposition  showed 
itself  in  both  in  favor  of  measures  for  lowering  the  pro- 
tective duties. 

Added  to  all  this,  the  state  of  the  finances  demanded 
immediate  attention.  The  redundant  revenue,  which  has 
forced  Congress  in  the  last  two  or  three  years  to  pay 
attention  to  the  question  of  tariff  reform,  had  the  same 
influence  in  1872.  In  each  of  the  fiscal  years,  1870-71  and 
1871-72,  the  surplus  revenue,  after  paying  all  appropria- 
tions and  all  interest  on  the  public  debt,  amounted  to 
about  $100,000,000,  a  sum  greatly  in  excess  of  any  re- 
quirements of  the  sinking  fund.  The  government  was 
buying  bonds  in  the  open  market  in  order  to  dispose  of 
the  money  that  was  flowing  into  the  treasury  vaults.8 

1  No  satisfactory  investigation  of  the  period  preceding  the  crisis  of  1873 
has  yet  been  made.  Of  the  fact  that  the  situation  was  especially  depressing 
for  the  agricultural  parts  of  the  country,  there  can  be  no  doubt.  The 
speculative  mania  and  the  fictitious  prosperity  of  those  years  were  felt  most 
strikingly  in  manufactures  and  railroad  building  ;  exactly  why  so  little  effect 
of  this  appeared  in  agriculture  has  never  been  clearly  explained.  The  whole 
period  will  repay  careful  economic  study. 

2  On  account  of  the  low  premium  on  bonds  and  the  high  premium  on  gold, 


J 82  HISTORY  OF  THE  EXISTING  TARIFF. 

This   being   the   state    of    affairs,    the   Committee   on 
Ways   and    Means    introduced    into    the    House   a   bill 
which    took   decided    steps    in    the    direction    of    tariff 
Reform  bill  ref°rm-      Mr.    Dawes,    of    Massachusetts,    the 
in  chairman  of   the  committee,  was   opposed    to 

the  recommendations  of  the  majority  of  its 
members,  and  therefore  left  the  explanation  and  man- 
agement of  the  bill  to  Mr.  Finkelnburg,  of  Missouri. 
That  gentleman  explained  that  the  committee's  measure 
was  intended  merely  to  u  divest  some  industries  of  the 
superabundant  protection  which  smells  of  monoply, 
and  which  it  was  never  intended  they  should  enjoy  after 
the  war." '  The  bill  lopped  off  something  from  the  protec- 
tive duties  in  almost  all  directions.  Pig-iron  was  to  be 
charged  $6.00  instead  of  $7.00  a  ton.  The  duties  on  wool 
and  woollens,  and  those  on  cottons,  were  to  be  reduced  by 
about  twenty  per  cent.  Coal,  salt,  and  lumber  were  subjected 
to  lower  duties.  Tea  and  coffee  were  also  to  pay  less ;  but 
the  duties  on  them  were  not  entirely  abolished, — a  circum- 
stance which  it  is  important  to  note  in  connection  with 
subsequent  events.  The  bill  still  left  an  ample  measure  of 
protection  subsisting ;  but  it  was  clearly  intended  to 
bring  about  an  appreciable  and  permanent  reduction  of 
the  war  duties. 

This  bill  was  introduced  into  the  House  in  April.      Be- 
fore that  time  another  bill  had  been  introduced   in  the 

it  was  cheaper  for  the  government  at  that  time  to  buy  bonds  in  the  open  mark'* 
than  to  redeem  them  at  par. 

1  See  Mr.  Finkelnburg's  speech,  Congr.  Globe,  1871-72,  pp.  2826-2829 


REDUCTION  OF  THE  TARIFF.  183 

Senate,  by  the  committee  of  that  body  on  finance,  which 
also   lowered  duties,  but  by  no  means  in  so 

Ten  per 

incisive   a   manner    as  the    House    bill.      The  cent.  reduc- 
Senate    bill    simply    proposed   to    reduce    all       tlon 

proposed. 

the  protective  duties  by  ten  per  cent.  When 
the  ten  per  cent,  reduction  was  first  suggested,  it  was 
strongly  opposed  by  the  protected  interests,  whose  rep- 
resentatives, it  is  hardly  necessary  to  say,  were  present 
in  full  force.  They  were  unwilling  to  yield  even  so  small 
a  diminution.  When,  however,  the  House  bill,  making 
much  more  radical  changes,  was  brought  forward  with  the 
sanction  of  a  majority  of  the  Committee  on  Ways  and 
Means,  they  saw  that  an  obstinate  resistance  to  any 
change  might  lead  to  dangerous  results.  A  change  of 
policy  was  accordingly  determined  on.  Mr.  John  L. 
Hayes,  who  has  been  for  many  years  Secre-  Policv  0f 
tary  of  the  Wool-Manufacturers'  Association,  the  protec- 
and  was  President  of  the  Tariff  Commission 
of  1882,  was  at  that  time  in  Washington  as  agent 
for  the  wool  manufacturers.  Mr.  Hayes  has  given  an 
account  of  the  events  at  Washington  in  1872,  from  which 
it  appears  that  he  was  chiefly  instrumental  in  bringing 
about  the  adoption  of  a  more  far-sighted  policy  by  the 
protectionists.1  Mr.  Hayes  believed  it  to  be  more  easy  to 
defeat  the  serious  movement  in  favor  of  tariff  reform 
by  making  some  slight  concessions  than  by  unconditional 

1  Seethe  speech  which  Mr.  Hayes  made,  shortly  after  the  close  of  the  ses- 
sion of  1872,  at  a  meeting  of  the  wool  manufacturers  in  Boston  ;  printed  in 
the  Bulletin  of  the  Wool  Manufacturers,  vol.  iii.,  pp.  283-290. 


1  84  HISTOR  Y  OF  THE  EXISTING  TARIFF. 

opposition.  The  woollen  manufacturers,  were  first  induced 
to  agree  to  this  policy  ;  the  Pennsylvania  iron  makers  were 
next  brought  over  to  it ;  and  finally,  the  whole  weight  of 
the  protected  interests  was  made  to  bear  in  the  same 
direction.  As  a  concession  to  the  demand  for  reform,  the 
general  ten  per  cent,  reduction  was  to  be  permitted.  With 
this,  however,  was  to  be  joined  a  sweeping  reduction 
of  the  non-protective  sources  of  revenue :  the  taxes  on 
whiskey  and  tobacco  were  to  be  lowered,  and  the  tea  and 
coffee  duties  were  to  be  entirely  abolished. 

This  plan  of  action  was  successfully  carried  out.  An 
act  for  abolishing  the  duties  on  tea  and  coffee  was  first 
passed.1  This  being  disposed  of,  the  general  tax  and  tariff 
bill  was  taken  up  in  the  House.  The  Senate  had  already 
indicated  its  willingness  to  act  in  the  manner  desired  by 
the  protectionists.  It  had  passed  and  sent  to  the  House 
a  bill  making  the  general  reduction  of  ten  per  cent.,  and 
nothing  remained  but  to  get  the  consent  of  the  House. 
But  this  consent  was  not  easily  obtained.  A  large  num- 
ber of  representatives  were  in  favor  of  a  more  thorough 
and  radical  reform,  and  wished  for  the  passage  of  the  bill 
prepared  by  the  Ways  and  Means  Committee.  But  un- 
fortunately the  reform  forces  were  divided,  and  only  a 
part  of  them  insisted  on  the  Ways  and  Means  bill.  The 
remainder  were  willing  to  accept  the  ten  per  cent,  reduc- 
tion, which  the  protectionists  yielded.    On  the  other  hand, 

'The  House  had  already  passed,  at  the  extra  session  in  the  spring  of 
■  1871, -a  bill  for  admitting  tea  and  coffee  free  of  duty.  This  bill  was  now 
taken  up  and  passed  by  the  Senate. 


REDUCTION  OF  THE  TARIFF.  1 85 

the  protectionist  members  were  united.  Messrs.  Kelley 
and  Dawes  led  them,  and  succeeded  in  bringing  their 
whole  force  to  vote  in  favor  of  the  horizontal  reduction. 
The  powerful  influence  of  the  Speaker,  Mr.  Blaine,  was  also 
on  their  side.  They  finally  succeeded  in  having  the  original 
committee  bill  set  aside,  and  in  passing  the  bill  for  the 
ten  per  cent,  reduction.  Most  of  the  revenue  reformers  in 
the  end  voted  for  it,  believing  it  to  be  the  utmost  that 

could  be  obtained.  It  must  be  observed,  how- 
Act  of  1872. 
ever,  to  their  credit,  that  the  "  horizontal  '  re- 
duction of  the  protective  duties  was  not  the  only  concession 
to  the  reform  feeling  that  was  made  by  the  act  of  1872.  It 
also  contained  a  number  of  minor  but  significant  changes 
of  duty.  The  duty  on  salt  was  reduced  to  one  half  the 
previous  rates;  for  the  feeling  against  the  war-duty  on 
salt,  which  very  clearly  resulted  in  putting  so  much  money 
into  the  pockets  of  the  Syracuse  and  Saginaw  producers, 
was  too  strong  to  be  resisted.  The  duty  on  coal  was  re- 
duced from  $1.25  to  75  cents  a  ton.  Some  raw  materials, 
of  which  hides  and  paper  stock  were  alone  of  considerable 
importance,  were  admitted  free  of  duty.  The  free  list 
was  also  enlarged  by  putting  on  it  a  number  of  minor 
articles  used  by  manufacturers.  But  the  important 
change  in  the  protective  duties  was  the  ten  per  cent,  re- 
duction, which  applied  to  all  manufactures  of  cotton, 
wool,  iron,  steel,  metals  in  general,  paper,  glass,  and 
leather, — that  is,  to  all  the  great  protective  industries. 
It  is  worth  while  to  dwell  for  a  moment  on  the  abolition 


f&(j  HISTORY   OF  THE  EXISTING  TARIFF, 

of  the  duties  on  tea  and  coffee.     At  the  time  much  was 
said   about   this  as  an    act   for  the  benefit   of 

Removal 

of  the  tea     tne    working    man,   to    whom    it    was    to    give 

and  coffee    a    "  free    breakfast-table."       In    fact,    as    it    is 
duties.        !        11  .  .... 

hardly    necessary   to    say,   it    was    a    distinctly 

protectionist  measure.  The  loss  of  revenue  which  it 
caused  would  ordinarily  have  to  be  made  good  by  impos- 
ing or  retaining  protective  duties.  As  matters  stood  in 
1872,  it  prevented  at  least  a  more  complete  reduction  of 
the  latter.  The  tea  and  coffee  duties  were  among  the 
simplest,  most  equable,  and  most  productive  sources  of 
national  revenue.  As  taxes,  they  were  little  felt  by  con- 
sumers. Most  important  to  note,  they  yielded  to  the 
government  every  thing  which  they  took  out  of  the 
pockets  of  the  tax-payers.  This  is  their  distinctive  ad- 
vantage over  protective  duties.  A  duty  on  imports,  like 
every  indirect  tax,  reaches  the  tax-payer  in  the  shape  of 
higher  prices  of  the  commodities  which  he  consumes. 
When  a  duty  is  imposed  on  an  article  like  tea  or  coffee, 
the  whole  increase  of  price  to  the  consumer  results  in  so 
much  revenue  to  the  government.  But  when  a  duty  is 
imposed  on  an  article  like  silks  or  linens,  and  results  in 
the  production  (or  in  an  increased  production)  of  this 
article  at  home,  the  effect  is  different.  Here  also  the 
commodity  is  increased  in  price  to  the  consumer,  and  he 
is  thereby  taxed.  So  far  as  he  uses  imported  articles,  the 
increased  price,  as  in  the  case  of  tea  and  coffee,  is  a  tax  paid 
to  the  government ;  and  as  such  it  is  not  specially  open  to 


REDUCTION  OF  THE  TAX  IF*  i%f 

objection.  But  when  the  consumer  buys  and  uses  an 
article  of  this  kind  which  is  made  at  home,  he  must  pay 
an  increased  price  quite  as  much  as  when  he  buys  the  im- 
ported article.  The  increase  of  price,  or  tax,  in  such  a 
case  is  not  paid  to  the  government,  but  to  the  home  pro- 
ducer. It  does  not  flow  into  the  national  revenue,  and 
does  not  serve  to  pay  for  the  performance  of  government 
functions.  It  flows  into  the  pockets  of  a  private  indi- 
vidual. The  private  individual  does  not  necessarily 
obtain,  on  account  of  this  tax,  exceptional  profits  in  the 
production  of  the  dutied,  i.  e.y  protected,  articles.  It  is  true 
that  in  some  cases  of  monopoly,  as  we  shall  have  occasion 
to  see,  he  may  permanently  make  high  profits.  But  in 
many  cases  he  fails  to  do  so.  It  may  cost  more,  from 
inherent  and  natural  causes,  to  make  the  protected  article 
at  home  than  it  costs  to  make  it  abroad.  In  this  case — the 
most  frequent — the  home  producer  gets  a  higher  price  in 
consequence  of  the  duty  ;  but  he  does  not  make  corre- 
spondingly high  profits.  The  tax  on  the  consumer  here 
represents  simply  the  greater  cost,  the  inherent  natural 
disadvantage,  of  making  the  commodity  at  home.  It 
represents  a  useless  diversion  of  national  industry.  A 
commodity  is  made  at  home  which  can  be  more  cheaply 
bought  abroad ;  and  nobody  is  benefited  by  the  tax  im- 
posed on  the  consumer.  All  this  is  clear  and  familiar  to 
every  one  who  has  grasped  the  fundamental  principles  of 
political  economy ;  but  so  great  a  mass  of  untrue  and 
sophistical  writing  is  constantly  put  forth  on  the  protec- 


1 88  HISTORY  OF  THE  EXISTING  TARIFF. 

tive  controversy,   that    the  sound   elementary  principles 
cannot  be  too  often  repeated. 

For  these  reasons  import  duties,  where  they  must  be 
levied,  should  be  imposed  primarily  on  articles  like  tea 
and  coffee,  of  which  the  domestic  production  will  not  be 
stimulated  by  the  duties.  In  a  government  like  ours, 
where  the  national  revenue,  by  tradition  and  from  the 
necessity  of  the  case,  is  chiefly  derived  from  import  duties, 
these  should  be  imposed  primarily  on  non-protected  com- 
modities. At  the  most,  it  is  only  after  such  articles  have 
yielded  the  revenue  that  they  can  reasonably  and  properly 
afford,  that  resort  should  be  had  to  duties  which  operate 
for  protection.  But  these  principles  have  been  often  lost 
sight  of  in  our  tariff  legislation.1  In  the  legislation  of  the 
last  twenty  years  they  have  been  entirely  disregarded. 
The  removal  of  the  tea  and  coffee  duties  is  only  one  of  a 
number  of  changes  of  the  same  kind.  Step  by  step,  in 
the  various  tariff  acts  which  have  been  passed  since  the 
war,  all  the  non-protective  duties  have  been  swept  away, 
in  order  that  the  protective  duties  might  be  retained. 
Articles  like  cocoa,  pepper,  cinnamon,  cloves,  olives,  the 
most  natural  and  proper  sources  of  revenue  from  import 
duties,  have  been  admitted  free  of  duty.  The  decisive 
step  in  this  process  was  the  tea  and  coffee  act  of  1872. 
There  are  at  present  none  other  than  protective  duties  in 
our  tariff.     In  recent  years,  when  it  has  again  brought  in 

1  Even  the  tariffs  of  1846  and  1857,  which  were  supposed  to  be  based  on 
principles  opposed  to  protection,  admitted  tea  and  coffee  free  of  duty,  while 
they  imposed  heavy  duties  on  iron,  cottons,  woollens,  etc. 


REDUCTION  OF  THE  TARIFF.  1 89 

an  excessive  revenue,  those  who  oppose  any  diminution 
of  protection  advocate,  as  a  step  analogous  to  the  aboli- 
tion of  the  tea  and  coffee  duties,  the  removal  of  the  in- 
ternal taxes  on  tobacco,  and  even  of  those  on  spirits. 
The  object  here  is  the  same  as  it  was  in  1872, — to  reduce 
the  revenue  without  touching  the  protective  parts  of  the 
tariff. 

To  return  from  this  digression  to  the  tariff  act  of  1872. 
The  free-traders  were  on  the  whole  satisfied  with  it  ;  they 
thought  it  a  step  in  the  right  direction,  and  the  beginning 
of  a  process  of  reform.  The  protectionists,  however, 
believed  that  they  had  won  a  victory  ;  and,  as  events 
proved,  they  were  right.1 

It  is  not  within  the  purpose  of  this  volume  to  discuss 
the  intrinsic  merits  of  a  "  horizontal  reduction,"  such  as 
was  carried  out  in  the  act  of  1872.  Undoubtedly  it  is 
a  simple  and  indiscriminating  method  of  approaching  the 
problem  of  tariff  reform.  The  objections  to  it  were 
very  prominently  brought  forward  when  Mr.  Morrison, 
during  the  session  of  1883-84,  proposed  to  take  off  ten  per 
cent,  from  the  duties,  in  exactly  the  same  way  that  the 
tariff  of  1872  had  taken  off  ten  per  cent.  It  is  certainly 
curious  that  this  method,  when  proposed  by  Mr.  Morrison 
in  1884,  should  be  vehemently  denounced  by  protectionists 

1  Mr.  Hayes,  in  the  speech  already  referred  to,  spoke  of  "the  grand  re- 
sult of  a  tariff  bill  reducing  duties  fifty-three  millions  of  dollars,  and  yet  leav- 
ing the  great  industries  almost  intact.  The  present  tariff  (of  1872)  was 
made  by  our  friends,  in  the  interest  of  protection."  And  again  :  "A 
reduction  of  over  fifty  millions  of  dollars,  and  yet  taking  only  a  shaving 
off  from  the  protection  duties." 


I90  HISTORY  OE  THE  EXISTING  T A  RIPE. 

as  crude,  vicious,  unscientific,  and  impractical,  although, 
when  proposed  by  Mr.  Dawes  in  1872,  it  received  their 
earnest  support.  There  is,  however,  one  objection  to 
such  a  plan  which  was  hardly  mentioned  in  connection 
with  Mr.  Morrison's  bill,  but  was  brought  out  very  clearly 
by  the  experience  of  1872.  This  is,  that  a  horizontal  re- 
duction  can  very  easily  be  revoked.  The  reduction  made 
in  1872  was  repealed  with  little  difficulty  in  1875.  After 
the  panic  of  1873,  imports  greatly  diminished,  and 
Ten  per  with  them  the  customs  revenue.  No  further 
cent,  reduc-  thought    of   tax    reduction    was    entertained  ; 

tion  re- 
pealed in     and  soon  a  need  of  increasing  the  revenue  was 

l875-  felt.  In  1875  Congress,  as  one  means  to  that 
end,  repealed  the  ten  per  cent,  reduction,  and  put  du- 
ties back  to  where  they  had  been  before  1872.'  The 
repeal  attracted    comparatively  little  attention,  and  was 

1  It  was  far  from  necessary,  for  revenue  purposes,  to  repeal  the  ten  per 
cent,  clause.  Mr.  Dawes  (who  advocated  in  1875  the  repeal  of  his  own 
measure  of  1 872)  attempted  to  show  the  need  of  raising  the  tariff  by  assum- 
ing that  a  fixed  sum  of  $47,000,000  per  year  was  necessary  for  the  sinking- 
fund, — that  the  faith  of  the  government  was  pledged  to  devoting  this  sum  to 
the  redemption  of  the  debt.  But  it  was  very  clearly  shown  that  the 
government  never  had  carried  out  the  sinking-fund  provision  in  any  exact 
way.  In  some  years  it  bought  for  the  sinking  fund  much  less  than  the  one 
per  cent  of  the  debt  which  was  supposed  to  be  annually  redeemed  ;  in  other 
years  (notably  in  1869-73)  it  bought  much  more  than  this  one  per  cent. 
The  same  policy  has  been  followed  in  recent  years.  There  can  be  little 
doubt  that  the  need  of  providing  for  the  sinking  fund  was  used  merely  as  an 
excuse  for  raising  the  duties.  See  Mr.  Wood's  remarks,  Congr.  Record, 
1874-75,  PP-  1187,  1188,  and  cf.  Mr.  Beck's  speech,  ibid.,  pp.1401,  1402. 

It  may  be  noted  that  in  1875  President  Grant  and  the  Secretary  of  the 
Treasury  recommended,  and  men  like  Senators  Sherman  and  Schurz  sup- 
ported, a  re-imposition  of  duties  on  tea  and  coffee  as  the  best  means  of  in- 
creasing the  customs  revenues. 


REDUCTION  OF  THE  TARIFF.  I9I 

carried  without  great  opposition.  If  a  detailed  examina- 
tion of  the  tariff  had  been  made  in  1872,  and  if  duties 
had  been  reduced  in  that  year  carefully  and  with  discrimi- 
nation, it  would  have  been  much  more  difficult  in  1875  to 
put  them  back  to  the  old  figures.  If  some  of  the  duties 
which  are  of  a  particularly  exorbitant  or  burdensome 
character  had  been  individually  reduced  in  1872,  public 
opinion  would  not  easily  have  permitted  the  restitution  of 
the  old  rates.  But  the  general  ten  per  cent,  reduction, 
which  touched  none  of  the  duties  in  detail,  was  repealed 
without  attracting  public  attention.  The  old  rates  were 
restored  ;  and  the  best  opportunity  which  the  country 
has  had  for  a  considerable  modification  of  the  protective 
system,  slipped  by  without  any  permanent  result. 

Of  the  attempts  at  reform  which  were  made  between 
1875  and  1883,  little  need  be  said.  Mr.  Morrison  in  1876. 
and  Mr.  Wood  in  1878,  introduced  tariff  bills  into  the 
House.  These  bills  were  the  occasion  of  more  or  less 
debate  ;  but  there  was  at  no  time  any  probability  of 
their  being  enacted.1  In  1879  *ne  duty  on  quinine  was 
abolished  entirely, — a  measure  most  beneficial  and  praise- 
worthy in  itself,  but  not  of  any  considerable  importance 
in  the  economic  history  of  the  country. 

Of  the  tariff  act  of  1883  we  do  riot  purpose  speaking  in 

1  Those  who  are  interested  in  the  details  of  these  measures  will  find  the 
bill  of  1876  explained  in  Mr.  Morrison's  speech,  in  Cong.  Record,  1S75-1S76, 
p.  3321.  The  bill  of  1878  was  similarly  explained  by  Mr.  Wood,  Cong. 
Record,  1877-78,  p.  2398.  It  was  at  one  time  supposed  that  Mr.  Wood's 
bill  might  be  passed  by  the  House  ;  but  the  enacting  clause  was  struck  out, 
after  some  debate,  by  a  vote  of  137  to  114. 


192  HISTORY  OF  THE  EXISTING  TARIFF. 

this  connection.     It  will  be  discussed  in  detail  in  the  con- 
cluding pages. 

We  have  now  completed  our  account  of  the  attempts 
to  reform  the  tariff  which  were  made  between  the  close  of 
the  Civil  War  and  the  act  of  last  year  (1883).  It  is  clear 
that  the  duties,  as  they  were  imposed  in  the  act  of  1864, 
were  retained  substantially  without  change  during  the 
whole  of  this  period.  The  non-protective  duties  were 
indeed  swept  away.  A  few  reductions  of  protective 
duties  were  made  in  the  acts  of  1870  and  1872;  but  the 
great  mass  of  duties  imposed  on  articles  which  are  pro- 
duced in  this  country  were  not  touched.  It  is  worth 
while  to  note  some  of  the  more  important  classes  of  goods 
on  which  the  duties  levied  in  1864  remained  in  force,  and 
to  compare  these  duties  with  the  rates  of  the  Morrill 
tariff  of  1 861.  The  increase  which  was  the  result  of  the 
war  will  appear  most  plainly  from  such  a  comparison.  In 
the  appended  table1  it  will  be  seen  that  the  rates  on  books, 
chinaware,  and  pottery,  cotton  goods,  linen,  hemp,  and 
jute  goods,  glass,  gloves,  bar-  and  hoop-iron,  iron  rails, 
steel,  lead,  paper,  and  silks,  were  increased  by  from  ten  to 
thirty  per  cent,  during  the  war,  and  that  the  increase  then 
made  was  maintained  without  the  slightest  change  till 
1883.  That  these  great'  changes,  at  the  time  when  they 
were  made,  were  not  intended  or  expected  to  be  per- 
manent, cannot  be  denied.  An  example  like  that  of  the 
duty  on  cotton  goods  shows  plainly  how  the  duties  were 

1  See  table  III.,  Appendix. 


REDUCTION  OF  THE  TARIFF.  1 93 

fixed  during  the  war  according  to  the  conditions  of  the 
time,  and  without  expectation  of  their  remaining  indefi- 
nitely in  force.  The  duty  on  the  cheapest  grade  of  cotton 
tissues  had  been  in  1861  fixed  at  one  cent  per  yard. 
During  the  war  the  price  of  cotton  rose  greatly,  and  with 
it  the  prices  of  cotton  goods.  Consequently  it  is  not  sur- 
prising to  find  the  duty  in  1864  to  be  five  cents  per  yard 
on  this  grade  of  cottons.  But  shortly  after  the  war,  raw 
cotton  fell  nearly  to  its  former  price  ;  and  it  does  occasion 
surprise  to  find  that  the  duty  of  five  cents  per  yard  should 
have  been  retained  without  change  till  1883,  and  even  in 
the  act  of  1883  retained  at  a  figure  much  above  that  of 
1 861.  The  duty  on  cheap  cottons  happens  not  to  have 
been  particularly  burdensome,  since  goods  of  this  kind  are 
made  in  this  country  as  cheaply  as  they  can  be  made 
abroad.  But  the  retention  of  the  war  duty  on  them,  even 
after  it  became  exorbitantly  high,  is  typical  of  the  way  in 
which  duties  were  retained  on  other  articles  on  which 
they  were  burdensome.  Duties  which  had  been  imposed 
during  the  war,  and  which  had  then  been  made  very  high, 
either  for  reasons  of  revenue  or  because  of  circumstances 
such  as  led  to  the  heavy  rate  on  cottons,  were  retained 
unchanged  after  the  war  ceased.  It  would  be  untrue  to 
say  that  protection  did  not  exist  before  the  great  struggle 
began,— the  tariff  of  1861,  was  a  distinctly  protectionist 
measure ;  but  it  is  clear  that  the  extreme  protectionist 
character  of  our  tariff  is  an  indirect  and  unexpected  result 
of  the  Civil  War. 


CHAPTER  III. 

HOW  DUTIES  WERE   RAISED   ABOVE   THE  WAR  RATES. 

In  the  preceding  chapter  it  has  been  shown  how  the 
duties  levied  during  the  war  failed  to  be  reduced  after  its 
close.  But  in  many  cases  not  only  has  there  been  a  failure 
to  diminish  the  war  rates,  but  an  actual  increase  over 
them.  We  have  already  noted  how  the  maintenance  of 
the  tariff  of  1864  brought  about  gradually  a  feeling  that 
such  a  system  was  a  good  thing  in  itself,  and  desirable  as 
a  permanent  policy.  This  feeling,  and  the  fact  that  Con- 
gress and  the  public  had  grown  accustomed  to  heavy 
taxes  and  high  rates,  enabled  many  measures  to  become 
law  which  under  normal  circumstances  would  never  have 
been  submitted  to.  In  the  present  chapter  we  are  con- 
cerned with  the  not  infrequent  instances  in  which,  in  obedi- 
ence to  the  demands  of  the  protected  interests,  duties 
were  raised  over  and  above  the  point,  already  high,  at 
which  they  were  left  when  the  war  closed.  The  most 
striking  instance  of  legislation  of  this  kind  is  to  be  found 
in  the  wool  and  woollens  act  of  1867;  a  measure  which 
is  so  characteristic  of  the  complications  of  our  tariff,  of 
the  remarkable  height  to  which  protection  has  been  car- 

194 


HOW  DUTIES  WERE  RAISED.  1 95 

ried  in  it,  and  of  the  submission  of  Congress  and  the 
people  to  the  demands  of  domestic  manu-  Wool  and 
facturers  that  it  deserves  to  be  described  woollen  act 
in  detail.  Such  a  description  is  the  more 
desirable  since  the  woollen  schedule  of  our  tariff  is  the 
one  which  imposes  the  heaviest  and  the  least  defensi- 
ble burdens  on  consumers,  and  at  the  same  time  is  the 
most  difficult  of  comprehension  for  those  who  have  noth- 
ing but  the  mere  language  of  the  statute  to  guide  them. 
In  order  to  understand  the  complicated  system  that  now 
exists,  we  must  go  back  to  the  Morrill  tariff  act  of  1861. 
In  that  act  specific  duties  on  wool  were  substituted  for  the 
ad-valorem  rates  of  1846  and  1857.  The  cheaper  kinds  of 
wool,  costing  eighteen  cents  or  less  per  pound,  were  still 
admitted  at  the  nominal  rate  of  five  per  cent.  But  wool 
costing  between  eighteen  and  twenty-four  cents  per  pound 
was  charged  three  cents  per  pound  ;  that  costing  more 
than  twenty-four  cents  was  charged  nine  cents  per  pound. 
The  duties  on  woollens  were  increased  correspondingly. 
An  ad-valorem  rate  of  twenty-five  per  cent,  was  levied  on 
them  ;  in  addition  they  paid  a  specific  duty  of  twelve 
cents  for  each  pound  of  cloth.  This  specific  duty  was 
intended  merely  to  compensate  the  manufacturers  for 
the  duty  on  wool,  while  the  ad-valorem  rate  alone  was  to 
yield  them  any  protection.  This  is  the  first  appearance  in 
our  tariff  history  of  the  device  of  exact  compensating 
duties.  Compensation  for  duties  on  raw  materials  used 
by  domestic  producers  had  indeed  been  provided  for  in 


196  HISTORY  OF  THE  EXISTING  TARIFF. 

previous  tariffs ;  but  it  was  not  until  the  passage  of  the 
Morrill  act  and  of  its  successors  that  it  came  to  be  applied 
in  this  distinct  manner.  As  the  principle  of  compensa- 
tion has  been  greatly  extended  since  1861,  and  is  the  key 
to  the  existing  system  of  woollen  duties,  it  may  be  well  to 
explain  it  with  some  care. 

It  is  evident  that  a  duty  on  wool  must  normally  cause 
The  the  price  of  all  wool  that  is  imported  to 
compensating  rise  by  the  full  extent  of  the  duty.  More- 
over, the  duty  presumably  causes  the  wool 
grown  at  home,  of  the  same  grade  as  that  imported, 
also  to  rise  in  price  to  the  full  extent  of  the  tax.  It 
is  clear  that,  if  foreign  wool  continues  to  be  imported, 
such  a  rise  in  the  price  of  domestic  wool  must  take  place ; 
since  wool  will  not  be  imported  unless  the  price  here  is 
higher,  by  the  amount  of  the  duty,  than  the  price  abroad. 
It  may  happen,  of  course,  that  the  tax  will  prove  prohibi- 
tory, and  that  the  importation  of  foreign  wool  will  cease ; 
in  which  case  it  is  possible  that  the  domestic  wool  is 
raised  in  price  by  some  amount  less  than  the  duty,  and 
even  possible  that  it  is  not  raised  in  price  at  all.  Assum- 
ing for  the  present  (and  this  assumption  was  made  in 
arranging  the  compensating  system)  that  domestic  wool 
does  rise  in  price,  by  the  extent  of  the  duty,  as  compared 
with  foreign  wool,  it  is  evident  that  the  American  manu- 
facturer, whether  using  foreign  or  domestic  wool,  is  com- 
pelled to  pay  more  for  his  raw  material  than  his  com- 
petitor abroad.     This  disadvantage  it  becomes  necessary 


HOW  DUTIES  WERE  RAISED.  1 97 

to  offset  by  a  compensating  duty  on  foreign  woollens. 
In  1 861  the  duty  on  wool  of  the  kind  chiefly  used  in  this 
country  (costing  abroad  between  ten  and  twenty-four 
cents  a  pound)  was  three  cents  a  pound.  The  compen- 
sating duty  for  this  was  made  twelve  cents  a  pound  on 
the  woollen  cloth,  which  tacitly  assumes  that  about  four 
pounds  of  wool  are  used  for  each  pound  of  cloth.  This 
specific  duty  was  intended  to  put  the  manufacturer  in  the 
same  situation,  as  regards  foreign  competition,  as  if  he 
got  his  wool  free  of  duty.  The  separate  ad-valorem  duty 
of  twenty-five  per  cent,  was  then  added  in  order  to  give 
protection. 

The  compensating  system  was  retained  in  the  acts  of 
1862  and  1864.  During  the  war,  it  is  needless  to  say,  the 
duties  on  wool  and  woollens  were  considerably  raised. 
They  were  increased,  and  to  some  extent  properly  in- 
creased, to  offset  the  internal  taxes  and  the  increased 
duties  on  dye-stuffs  and  other  materials;  and  care  was 
taken,  in  this  as  in  other  instances,  that  Wool  and 
the  increase  in  the  tariff  should  be  sufficient  woollen  du- 
and  more  than  sufficient  to  prevent  the  do-  ies  °  •  4' 
mestic  producer  from  being  unfairly  handicapped  by 
the  internal  taxes.  In  the  final  act  of  1864  the  duties 
on  wool  were  as  follows : 

On  wool  costing  12  cents  or  less,  a  duty  of  3  cents  per  pound. 
M      "         "       between  12  and  24  cents,  a  duty  of  6  cents  per  pound. 

"        24  and  32  cents,  a  duty  of  10  cents  per  pound, 
plus  ten  per  cent. 
On  wool  costing  more  than  32  cents,  a  duty  of  12  cents  per  pound,  plus  ten 
pertent.1 

1  Exactly  how  this  duty  on  wool  of  ten  per  cent,  on  the  value,  in  addition 


I98  HISTORY  OF  THE  EXISTING  TARIFF. 

The  wool  chiefly  imported  and  chiefly  used  by  our 
manufacturers  was  that  of  the  second  class,  costing 
between  twelve  and  twenty-four  cents  per  pound,  and 
paying  a  duty  of  six  cents.  The  compensating  duty  on 
woollens  was  therefore  raised  in  1864  to  twenty-four 
cents  per  pound  of  cloth.  The  ad-valorem  (protective) 
duty  on  woollens  had  been  raised  to  forty  per  cent. 

During  the  war  the  production  of  wool  and  woollens 
had  been  greatly  increased.  The  check  to  the  manufacture 
of  cotton  goods,  which  resulted  from  the  stoppage  of  the 
great  source  of  supply  of  raw  cotton,  caused  some  in- 
crease in  the  demand  for  woollens.  The  government's  need 
of  large  quantities  of  cloth  for  army  use  was  also  an  im- 
portant cause.  After  the  war,  a  revolution  was  threatened. 
Cotton  bade  fair  to  take  its  former  place  among  textile 
goods ;  the  government  no  longer  needed  its  woollens,  and 
threw  on  the  market  the  large  stocks  of  army  clothing 
which  it  had  on  hand.  In  the  hope  of  warding  off  the  immi- 
nent depression  of  their  trade,  the  wool  growers  and  manu- 
facturers made  an  effort  to  obtain  still  further  assistance 
from  the  government.  A  convention  of  wool  growers  and 
manufacturers  was  held  in  Syracuse,  N.  Y.,  in  December, 
1865.  That  both  these  classes  of  producers,  as  a  body,  un- 
derstood and  supported  the  views  of  this  meeting,  is  not  at 
all  certain.    The  mass  of  wool  growers  undoubtedly  knew 

to  the  specific  duty,  came  to  be  imposed,  the  writer  has  never  seen  satisfac- 
torily  explained.  It  probably  came  into  the  tariff  in  connection  wjth  the 
discriminating  duty  of  ten  per  cent,  which  was  imposed  on  good*  imp*?«*«d 
in  the  vessels  of  nations  that  had  no  treaty  of  commerce  with  us. 


HOW  DUTIES  WERE  RAISED.  1 99 

nothing  of  it ;  they  were  represented  chiefly  by  a  few  breed- 
ers of  sheep.  Among  the  manufacturers,  many  held  aloof 
from  it  when  its  character  became  somewhat  more  plain. 
There  is  good  evidence  to  show  that  the  whole  movement 
was  the  work  of  a  few  energetic  manufacturers  of 
New  England,  engaged  chiefly  in  producing  carpets  and 
worsted  goods,  and  of  some  prominent  breeders  of  sheep.1 
The  fact  that  the  rates  of  duty,  as  arranged  by  the 
Syracuse  convention,  were  especially  advantageous  to 
certain  manufacturers — namely,  those  who  made  carpets, 
worsted  goods,  and  blankets, — tends  to  support  this  view. 
On  the  surface,  however,  the  movement  appeared  to  be 
that  of  the  growers  and  manufacturers  united.  The 
latter  agreed  to  let  the  wool  producers  advance  the  duty 
on  the  raw  material  to  any  point  they  wished  ;  they  under- 

1  "  This  tariff  (of  1867)  was  devised-  by  carpet  and  blanket  makers,  who 
pretended  to  be  '  The  National  Woollen  Manufacturers'  Association,'  in 
combination  with  certain  persons  who  raised  fine  bucks  and  wished  to  sell 
them  at  high  prices,  and  who  acted  in  the  name  of  '  The  National  Wool- 
Growers'  Association.'  *  *  *  A  greater  farce  was  never  witnessed 
*  *  *  Many  who  took  part  in  the  proceedings  of  1866,  finding  that  the 
Association  [of  Wool  Manufacturers]  was  used  for  the  convenience  of  spe- 
cial interests,  have  since  withdrawn." — Harris,  "  Memorial,"  pp.  22,  23. 

Mr.  Harris  says  elsewhere:  "The  carpet  interest  was  predominant  [in 
the  Wool  Manufacturers'  Association].  *  *  *  The  President  was,  and 
is  now  (1871),  a  large  carpet  manufacturer  ;  and  the  Secretary  was  a  very 
talented  and  astute  politician,  from  Washington,  chosen  by  the  influence  of 
the  President."  And  again:  "The  Association  having  spent  considerable 
sums  in  various  ways  peculiar  to  Washington  (the  italics  are  Mr.  Harris's) 
increased  the  annual  tax  on  its  members  very  largely  ;  and  at  the  present 
time  (1871)  it  is  hopelessly  in  debt  to  its  President." — "Protective  Duties," 
pp.  9,  10  ;  "  The  Tariff,"  p.  17.  See  also  "  Argument  on  Foreign  Wool 
Tariff  before  Finance  Committee  of  Senate,"  New  York,  1871. 


200  HISTORY  OF  THE  EXISTING  TARIFF. 

took,  by  means  of  the  compensating  device,  to  prevent 
any  injury  to  themselves  from  the  high  duty  on  the 
wool  they  used.  The  tariff  schedule  which  was  the  result 
of  this  combination  was  approved  by  the  United  States 
Revenue  Commission.1  It  was  made  a  part  of  the  unsuc- 
cessful tariff  bill  of  1867,  already  referred  to2  ;  and  when 
that  bill  failed,  it  was  made  law  by  a  separate  act,  to 
whose  passage  no  particular  objection  seems  to  have  been 
made.  The  whole  course  of  events  forms  the  most  strik- 
ing example — and  such  examples  are  numerous — of  the 
manner  in  which,  in  recent  tariff  legislation,  regard  has 
been  had  exclusively  to  the  producer.  Here  was  an  in- 
tricate and  detailed  scheme  of  duties,  prepared  by  the 
producers  of  the  articles  to  be  protected,  openly  and 
avowedly  with  the  intention  of  giving  themselves  aid  ; 
and  yet  this  scheme  was  accepted  and  enacted  by  the 
National  Legislature  without  any  appreciable  change  from 
the  rates  asked  for,  and  without  question  as  to  its  effect 
on  the  people  at  large.3 

We  turn  now  to  examine  this  act  of  1867,  which  re- 
mained in   force  till    1883,  and   in  which   no  changes  of 

1  Mr.  Stephen  Colwell,  a  disciple  of  the  Carey  protectionist  school,  was 
the  member  of  this  commission  who  had  charge  of  the  wood  and  woollens 
schedule.  Mr.  Wells,  who  was  also  a  member  of  the  commission,  had 
nothing  to  do  with  this  part  of  the  tariff. 

2  Ante,  p.  21. 

3  The  proceedings  of  the  Syracuse  convention  may  be  found  in  full  in  the 
volume  of  "Transactions  of  the  Wool  Manufacturers"  ;  also  in  "  U.  S. 
Revenue  Report,  1866,"  pp.  360-419.  Mr.  Colwell's  endorsement  of  the 
scheme  h  also  in  "  U.  S.  Revenue  Report,  1866,"  pp.  347~356.  Mr.  Wells, 
in  his  report  of  1867,  sharply  criticised  the  act  as  passed. 


HO  W  DUTIES  WERE  RAISED.  201 

great  importance  are  made  by  the  existing  tariff.  In  this 
examination  we  will  follow  the  statement  published  in 
1866,  in  explanation  of  the  new  schedule,  by  the  Execu- 
tive Committee  of  the  National  Association  of  Wool 
Manufacturers.1  To  begin  with,  the  duties  Act  of  l86 
on  wool  were  arranged  on  a  new  plan.  Wool  Duty  on 
was  divided  into  three  classes :  carpet,  cloth- 
ing, and  combing  wool.2  The  first  class,  carpet  wool, 
corresponded  to  the  cheap  wools  of  the  tariff  of 
1864.  The  duty  was  three  cents  1  pound  if  it  cost 
twelve  cents  or  less,  and  six  cents  a  pound  if  it  cost 
more  than  twelve  cents.  The  other  two  classes,  of  cloth- 
ing and  combing  wools,  are  the  grades  chiefly  grown  in 
this  country,  and  therefore  are  most  important  to  note  in 
connection  with  the  protective  controversy.  The  duties 
on  these  were  the  same  for  both  classes.  Clothing  and 
combing  wools  alike  were  made  to  pay  as  follows  : 

Value  32  cents  or  less,  a  duty  of    10  cents    per  pound  and  11  per  cent. 

ad  valorem. 

Value   more  than    32  cents,   a   duty   of    12    cents   per  pound  and  10  per 

cent,  ad  valorem} 

1  See  "  Statement  of  the  Executive  Committee  of  the  Wool  Manufacturers 
Association  to  the  U.  S.  Revenue  Commisson,"  printed  in  "  Transactions," 
as  above  ;  also  printed  in  "  Revenue  Report  for  1866,"  pp.  441-460. 

2  Clothing  wool  is  of  comparatively  short  fibre  ;  it  is  carded 'as  a  preparation 
for  spinning  ;  it  is  used  for  making  cloths,  cassimeres,  and  the  other  common 
woollen  fabrics.  Combing  wool  is  of  longer  fibre  ;  it  is  combed  in  a  comb- 
ing machine  as  a  preparation  for  spinning  ;  and  it  is  used  in  making  worsted 
goods,  and  other  soft  and  pliable  fabrics. 

3  Mere  again  we  have  the  rather  absurd  combination  of  specific  and  ad-va- 
lorem duties  on  wool.       In  the  act  of  1867,  there  is  the  further  complication 


202  HISTORY  OF  THE  EXISTING  TARIFF. 

Comparing  these  figures  with  the  rates  of  1864,  one  would 
not,  at  first  sight,  note  any  great  change.      In   1864,  wool 
costing  between  twenty-four  and  thirty-two  cents  had  been 
charged    ten    cents    per   pound   plus   ten   per   cent,   ad 
valorem  ;  and  wool  costing  more  than  thirty-two  cents  had 
paid  twelve  cents  a  pound  plus  ten  per  cent.    These  seem 
to  be  almost  exactly  the  rates  of  1867.     But  in  fact,  by 
the  change  in  classification,  a  very  considerable  increase 
in  the  duty  was  brought  about.     In  1867  all  wool  costing 
less  than  thirty-two  cents  was  made  to  pay  the  duty  of  ten 
cents  per  pound  and  eleven  per  cent.     In  1864  wool  cost 
ing  (abroad)  between  eighteen  and  twenty-four  cents  had 
been  charged  only  six  cents  per  pound.     This  is  the  class 
of  wool  chiefly  grown  in  the  United  States,  and  chiefly 
imported  hither;  and   it  was  charged  in    1867  with  the 
•  duty  of  ten  cents  and   eleven  per  cent.     With  the  ad- 
valorem  addition,  the  duty  of  1867  amounted  to  eleven 
and   a  half  or  twelve  cents   a  pound,   or  about    double 
the  duty  of  1864.     The  consequence  was  that  in  reality 
the  duty  on   that  grade   of   wool  which  is  chiefly  used 
in  this  country  was  nearly  doubled  by  the  act  of  1867  ;  and 
the  increase  was  concealed  under  a  change  in  classification. 
The  duty  on  clothing  and    combing  wools,   as  fixed  in 

that  the  ad-valorem  duty  is  in  the  one  case  ten  per  cent. ,  in  the  other  eleven 
per  cent.  This  difference  resulted  by  accident,  as  the  writer  has  been  in- 
formed, from  the  need  of  complying  technically  with  certain  parliamentary 
rules  of  the  House.  It  is  hardly  necessary  to  say  that  this  mixture  of  specific 
and  ad-valorem  duties  on  wool  has  no  connection  with  the  compensating 
system.  The  compensating  scheme  accounts  only  for  the  two  kinds  of 
duties  on  woollen  goods. 


HOW  DUTIES  WERE  RAISED.  203 

1867,  has  been  on  the  average  more  than  fifty  per  cent,  on 
the  value  abroad. 

The  duty  on  wool  being  fixed  in  this  way,  that 
on  woollens  was  arranged  on  the  following  The  dut  on 
plan.  It  was  calculated  that  four  pounds  woollen 
of  wool  (unwashed)  were  needed  to  produce 
a  pound  of  cloth.  The  duty  on  wool,  as  has  been  ex- 
plained, amounted  to  about  eleven  and  one  half  cents 
a  pound,  taking  the  specific  and  ad-valorem  duty  to- 
gether. Each  of  the  four  pounds  of  wool  used  in  mak- 
ing a  pound  of  cloth,  paid,  if  imported,  a  duty  of  four  times 
eleven  and  one  half  cents,  or  forty-six  cents.  If  home, 
grown  wool  was  used,  the  price  of  this,  it  was  assumed, 
was  equally  raised  by  the  duty.  The  manufacturer  in 
either  case  paid,  for  the  wool  used  in  making  a  pound  of 
cloth,  forty-six  cents  more  than  his  foreign  competitor. 
For  this  disadvantage  he  must  be  compensated.  More- 
over, the  manufacturer  in  the  United  States,  in  1867,  paid 
duties  on  drugs,  dye-stuffs,  oils,  etc.,  estimated  to  amount 
to  two  and  one  half  cents  per  pound  of  cloth.  For  this 
also  he  must  be  compensated.  In  addition  he  must  have 
interest  on  the  duties  advanced  by  him  ;  for  between  the 
time  when  he  paid  the  duties  on  the  wool  and  other 
materials,  and  the  time  when  he  was  reimbursed  by  the 
sale  of  his  cloth,  he  had  so  much  money  locked  up.  Add 
interest  for,  say  six  months,  and  we  get  the  final  total  of 
the  duty  necessary  to  compensate  the  manufacturer  for 
what  he  has  to  pay  on  his  raw  materials,  The  account 
stands : 


204  HISTORY  OF  THE  EXISTING  TARIFF. 

Duty  on  4  pounds  of  wool  at  n^  cents     ...         46     cents 

"      "  oils,  dye-stuffs,  etc 2$     " 

Interest .  4i     " 

Total 53 

Congress  did  not  accept  the  exact  figure  set  by  the 
woollen  makers.  It  made  the  compensating  duty  fifty 
cents  per  pound  of  cloth  instead  of  fifty-three ;  but  this 
change  was  evidently  of  no  material  importance.  The 
woollen  manufacturers  got  substantially  all  that  they 
wanted.  It  will  be  remembered  that  in  1864  the  com- 
pensating specific  duty  on  cloth  had  been  only  twenty- 
four  cents  per  pound. 

The  ad-valorem  duty  was  fixed  at  thirty-five  per  cent. 
The  woollen  manufacturers  said  they  wanted  a  "  net  effec- 
tive protection  "  of  only  twenty-five  per  cent.1  This  does 
not  seem  immoderate.  But  ten  per  cent  ad-valorem  was 
supposed  to  be  necessary  to  compensate  for  the  internal 
taxes,  which  were  still  imposed  in  1867,  though  abolished 
very  soon  after.  This  ten  per  cent.,  added  to  the  desired 
protection  of  twenty-five  per  cent,  brought  the  ad-valorem 

1  "  All  manufactures  composed  wholly  or  in  part  of  wool  or  worsted  shall 
be  subjected  to  a  duty  which  shall  be  equal  to  twenty-five  per  cent,  net  ; 
that  is,  twenty-five  per  cent,  after  reimbursing  the  amount  paid  on  account 
of  wool,  dye-stuffs,  and  other  imported  materials,  and  also  the  amount  paid 
for  the  internal  revenue  tax  imposed  on  manufactures  and  on  the  supplies 
and  materials  used  therefor."  Joint  Report  of  Wool  Manufacturers  and  Wool 
Growers,  "Revenue  Report,  for  1866,"  p.  430;  also  in  "Transactions." 
The  Executive  Committee  of  the  Wool  Manufacturers'  Association  said,  in 
1866:  "Independently  of  considerations  demanding  a  duty  on  wool,  the 
wool  manufacturers  would  prefer  the  total  abolition  of  specific  duties,  pro- 
vided they  could  have  all  their  raw  material  free,  and  an  actual  net  protec- 
tion of  twenty-five  percent."     Harris,  "  Memorial,"  p.  9. 


HO W  DUTIES  WERE  RAISED.  205 

rate  to  thirty-five  per  cent.  The  final  duty  on  woollen 
cloth  was  therefore  fifty  cents  per  pound  and  thirty-five 
per  cent,  ad  valorem :  of  which  the  fifty  cents  was  com- 
pensation for  duties  on  raw  materials  ;  ten  per  cent,  was 
compensation  for  internal  tax ;  and  of  the  whole  accumu- 
lated mass  only  twenty-five  per  cent,  was  supposed  to  give 
protection  to  the  manufacturer. 

This  duty  was  levied  on  woollen  cloths,  woollen  shawls, 
and  manufactures  of  wool  not  otherwise  provided  for — 
categories  which  include  most  of  the  woollen  goods  made 
in  this  country.  On  other  classes  of  goods  the  same  sys- 
tem was  followed.  An  ad-valorem  duty  of  Duty 
thirty-five  per  cent,  was  imposed  in  all  cases  ;  on   flannels» 

carpets, 

twenty-five  per  cent,  being  intended  to  be  ^ress  goods, 
protection,  and  ten  per  cent,  compensation  for  etc- 
internal  taxes.  The  specific  duty  varied  with  different 
goods,  but  in  all  cases  was  supposed  merely  to  offset 
the  import  duties  on  wool  and  other  supplies.  For  in- 
stance, on  flannels,  blankets,  and  similar  goods,  the  spe- 
cific duty  varied  from  fifty  cents  a  pound  to  twenty  cents, 
being  made  to  decrease  on  the  cheaper  qualities  of  goods, 
as  less  wool,  or  cheaper  wool,  was  used  in  making  a  pound 
of  flannel  or  blanket.  The  duties  on  knit  goods  were  the 
same  as  those  on  blankets.  On  carpets  the  system  was 
applied  with  some  modification.  The  specific  duty  was 
levied  here  by  the  square  yard,  and  not  by  the  pound. 
A  calculation  was  made  of  the  quantity  of  wool,  linen, 
yarn,  dye-stuffs,  and  other  imported  articles  used  for  each 


206  HISTORY  OF  THE  EXISTING  TARIFF. 

yard  of  carpet ;  the  total  duties  paid  on  these  materials, 
with  interest  added  as  in  the  case  of  cloth,  gave  the  com- 
pensating duty  per  yard  of  carpet.  On  this  basis,  for  in- 
stance, the  specific  duty  on  Brussels  carpets  was  made 
forty-four  cents  per  yard  (the  manufacturers  had  asked  for 
a  duty  of  forty-eight  cents) ;  the  ad-valorem  duty  of 
thirty-five  per  cent,  being  of  course  also  imposed.  In  the 
same  way  the  specific  duty  on  dress  goods  for  women's 
and  children's  wear  was  made  from  six  to  eight  cents  per 
yard,  according  to  quality.  It  is  evident  that  the  task  of 
making  the  specific  duty  exactly  compensate  for  the  duties 
on  wool  was  most  complicated  in  these  cases,  and  that 
any  excess  of  compensation  would  here  be  most  difficult 
of  discovery  for  those  not  very  familiar  with  the  details  of 
the  manufacture.  As  a  matter  of  fact,  it  is  precisely  in 
these  schedules  of  the  woollens  act  that,  as  we  shall  see, 
the  "  compensating  "  system  was  used  as  a  means  of  secur- 
ing a  high  degree  of  protection  for  the  manufacturer. 

These  duties,  ad  valorem  and  specific  taken  together, 
have  been  from  fifty  to  one  hundred  per  cent.,  and  even 
more,  on  the  cost  of  the  goods.  On  cloths  generally  they 
have  been  from  sixty  to  seventy  per  cent,  on  the  value. 
On  blankets  and  flannels  they  have  been  from  eighty  to 
one  hundred  per  cent.,  and  have  been  entirely  prohibitory 
of  importation.  On  dress  goods  they  have  been  from 
sixty  to  seventy  per  cent.  ;  on  Brussels  carpets  again 
from  sixty  to  seventy  per  cent.  ;  and  on  ingrain  carpets 
from  fifty  to  fifty-five  per  cent.     Yet  a  net  protection  of 


HOW  DUTIES  WERE  RAISED.  20? 

twenty-five  per  cent,  is  all  that  the  manufacturers  asked 
for  and  were  intended  to  have;  and  the  question  naturally 
presents  itself,  did  they  not  in  fact  get  more  than  twenty- 
five  per  cent.  ? 

The  first  conclusion  that  can  be  drawn  from  this  expla- 
nation of  the  woollens  duties  is  that  there  was  at  all 
events  no  good  reason  for  the  permanent  retention  of  the 
ad-valorem   rate   of   thirty-five   per    cent.      Of 

Comment 

that  rate  ten  per  cent,  was  in  all  cases  meant       onthe 
to  compensate  for  the  internal  taxes.     These  ad-valorem 

..  .  .      .  ...  duty. 

disappeared  entirely  within  a  year  or  two 
after  the  woollens  act  was  passed..  Yet  the  ad-valorem 
rate  on  woollens  remained  at  thirty-five  per  cent,  without 
change  from  1867  to  1883.  In  the  present  tariff,  that  of 
1883,  it  still  is  thirty-five  per  cent,  in  most  cases;  and 
where  it  has  been  changed  at  all,  it  has  even  been  raised  to 
forty  per  cent.  There  is  no  more  striking  illustration  of 
the  way  in  which  duties  which  were  imposed  in  order  to 
offset  the  internal  taxes  of  the  war  period,  have  been 
retained  and  have  become  permanent  parts  of  our  tariff 
system,  although  the  original  excuse  for  their  imposition 
has  entirely  ceased  to  exist. 

It  may  seem  that  the  retention  of  the  specific  duties 
on  woollens   was   justified,    since    the    duties  comment  on 
on   wool   were    not  changed.     It   is   true  that  the  specific 
the  duties  on    dye-stuffs,   drugs,  and    such   ar-        uties* 
tides    have    been    abolished    or    greatly    reduced    since 
1867  ;  but  these  played  no  great  part  in  the  determina- 


208  HISTORY  OF  THE  EXISTING  TARIFF. 

tion  of  the  specific  duty.  The  duties  on  wool  were 
not  changed  till  the  passage  of  the  act  of  1883.  There 
are,  however,  other  grounds  for  criticising  the  specific 
duties  on  woollens,  which  have  been  in  fact  not  merely 
compensating,  but  have  added,  in  most  cases,  a  consider- 
able degree  of  protection  to  the  "  net  "  twenty-five  per 
cent,  which  the  act  of  1867  was  supposed  to  give  the 
manfacturers. 

The  compensating  duties,  as  we  have  seen,  were  based 
on  two  assumptions :  first,  that  the  price  of  wool,  whether 
foreign  or  domestic,  was  increased  by  the  full  extent  of 
the  duty  ;  second,  that  four  pounds  of  wool  were  used  in 
making  a  pound  of  cloth.  The  first  assumption,  however, 
holds  good  only  to  a  very  limited  extent.  A  protective 
duty  does  not  necessarily  cause  the  price  of  the  protected 
article  to  rise  by  the  full  extent  of  the  duty.  It  may  be 
prohibitory;  the  importation  of  the  foreign  article  may 
entirely  cease ;  and  the  domestic  article,  while  its  price  is 
raised  to  some  extent,  may  yet  be  dearer  by  an  amount  less 
than  the  duty.  This  is  what  has  happened  with  regard  to 
most  grades  of  wool.  The  commoner  grades  of  wool  are 
raised  in  this  country  with  comparative  ease.  The  duty 
on  them  is  prohibitory,  and  their  importation  has  ceased. 
Their  price,  though  higher  than  that  of  similar  wools 
abroad,  is  not  higher  by  the  full  extent  of  the  duty.  It  is 
true  that  the  importation  of  finer  grades  of  clothing  and 
combing  wools  continues  ;  and  it  is  possible  that  the  wools 
of  Ohio,  Michigan,  and  other  States  east  of  the  Mississippi 


HOW  DUTIES  WERE  RAISED,  209 

are  higher  in  price,  by  the  full  amount  of  the  duty,  than 
similar  wools  abroad.  Even  this  is  not  certain  ;  for  the 
wools  which  continue  to  be  imported  are  not  of  precisely 
the  same  class  as  the  Ohio  and  Michigan  wools.  As  a 
rule,  the  importations  are  for  exceptional  and  peculiar  pur- 
poses, and  do  not  replace  or  compete  with  domestic  wools. 
At  all  events,  it  is  certain  that  the  great  mass  of  wools 
grown  in  this  country  are  entirely  shielded  from  foreign 
competition.  Their  price  is  raised  above  the  foreign 
price  of  similar  material ;  but  raised  only  by  some  amount 
less  than  the  duty.  The  manufacturer,  however,  gets  a 
compensating  duty  in  all  cases  as  if  his  material  were 
dearer,  by  the  full  extent  of  the  duty,  than  that  of  his 
foreign  competitor.  The  bulk  of  the  wool  used  by  Ameri- 
can manufacturers  does  not  show  the  full  effect  of  the 
tariff,  and  the  manufacturers  clearly  obtain,  in  the  specific 
duty,  more  compensation  than  the  higher  price  of  their 
wool  calls  for.  The  result  is  that  this  duty,  instead  of 
merely  preventing  the  domestic  producer  from  being  put 
at  a  disadvantage,  yields  him  in  most  cases  a  considerable 
degree  of  protection,  over  and  above  that  given  by  the 
ad-valorem  duty.1 

There  is  another  way  in  which  the  compensating  duty 
is  excessive.     A  very  large  quantity  of  woollen  goods  are 

1  See  the  instructive  remarks  of  Mr.  John  L.  Hayes,  in  Bulletin  Wool 
Manufacturers  vol.  xiii.  pp.  98-108.  Cf.  "  Tariff  Comm.  Report,"  pp. 
1 782-1785.  The  production  and  importation  of  wool  in  different  parts  of 
the  country  for  a  series  of  years  are  given  in  some  detail  in  "  Tariff 
Comm.  Report,"  pp.  2435,  2436. 


2IO  HISTORY  OF  THE  EXISTING  TARIFF. 

not  made  entirely  of  wool.  Cotton,  shoddy,  and  other 
substitutes  are  in  no  inconsiderable  part  the  materials  of 
the^  clothes  worn  by  the  mass  of  the  people.'  In  these 
goods  very  much  less  than  four  pounds  of  wool  is  used  in 
making  a  pound  of  cloth,  and  the  specific  duty  again 
yields  to  the  manufacturer  a  large  degree  of  protection. 

The  second  assumption  of  the  compensating  system, 
that  four  pounds  of  wool  are  used  in  making  a  pound  of 
cloth,  is  also  open  to  criticism.  The  goods  in  which 
cotton  and  shoddy  are  used  clearly  do  not  require  so 
much  wool.  But  it  is  probable  that  even  with  goods 
made  entirely  of  wool,  the  calculation  of  four  pounds  of 
unwashed  wool  for  each  pound  of  cloth  is  very  liberal. 
Wool,  unwashed,  shrinks  very  much  in  the  cleaning  and 
scouring  which  it  must  receive  before  it  is  fit  for  use; 
and  the  loss  by  wear  and  waste  in  the  processes  of  manu- 
facture is  also  considerable.  The  shrinkage  in  scouring  is 
subject  to  no  definite  rule.  In  some  cases  wool  loses  only 
forty  per  cent,  of  its  weight  in  the  process,  in  others  as 
much  as  seventy-five  per  cent.  The  shrinkage  in  scouring 
on  American  wools  is  rarely  more  than  sixty  per  cent ; 
and  if  to  this  is  added  a  further  loss  of  twenty-five  pe? 
cent,  in  manufacture,  there  will  be  needed  for  a  pound  oi 
cloth  no  more  than  three  and  one  third  pounds*  of  wool.' 

1  See,  as  to  the  loss  of  wool  in  scouring,  Quarterly  Report  Bureau  of  Sta- 
tistics, for  quarter  ending  June  30,  1S84,  pp.  563-565  ;  Harris,  "  Memorial, " 
p.  11  ;  Schoenhof,  "Wool  and  Woollens,"  p.  10  ;  Bulletin  IVoolMf.,  vol.  xiii., 
p.  8.  The  least  loss  I  have  found  mentioned  is  twenty-five  per  cent,  (coarse 
Ohio),  and  the  highest  seventy  per  cent.  (Buenos  Ayres  wool).     Ordinary 


HOW  DUTIES  WERE  RAISED.  21  t 

With  the  great  majority  of  goods  made  in  this  country, 
the  shrinkage  and  the  loss  in  manufacture  do  not  amount 
to  more  than  this.  The  calculation  of  four  for  one  is  for 
most  American  goods  a  liberal  one  ;  and  it  is  evident  that 
the  compensating  duty,  based  on  this  liberal  calculation, 
yields  a  degree  of  protection  in  the  same  way  that  it  does 
on  goods  that  contain  cotton  or  shoddy.  On  the  other 
hand,  there  are  some  grades  of  imported  wool  on  which 
the  shrinkage  and  loss  in  manufacture  are  so  great  that 
the  compensating  duty  is  not  excessive.  Some  grades  of 
Australian  wool,  which  are  imported  for.  manufacturing 
fine  goods  and  worsteds,  are  subject  to  exceptional 
shrinkage  and  to  exceptional  waste  in  the  process  of 
manufacture.  Of  this  class  of  wool  four  pounds,  and 
sometimes  a  little  more,  are  apt  to  be  used  for  a  pound 
of  cloth.1     In  such  cases  the  compensating  duty  evidently 

American  wool  loses  between  fifty  and  sixty  per  cent,  in  scouiing.  The  loss 
in  weight  in  manufacturing  varies  much  with  the'  processes,  but  with  care 
will  not  exceed  twenty-five  per  cent.     With  most  goods  it  is  less.- 

If  the  loss  in  scouring  ioo  lbs.  of  wool  is  sixty  per 

cent.,  there  remain      .  .  .  .  .         40  lbs.  scoured  wool. 

Deduct  twenty-five  per  cent,  for  loss  in  manufacture  10  lbs. 


Leaves  .         .         30  lbs.  of  cloth, 

or  1  lb.  of  cloth  for  3^  lbs.  of  wool. 

If  the  loss  in  scouring  100  lbs.  of  wool  is  sixty-five 

per  cent,  there  remain  35  lbs.  scoured  wool. 

Deduct  twenty-five  per  cent,  for  loss  in  manufacture 

8|  lbs. 


Leaves  . 
or  I  lb.  cloth  for  not  quite  4  lbs.  of  wool. 

'See  the  instances  given  by  Mr.  Hayes  in  Wool  Manufacturers'  Bulletin, 
vol.  xii.,  pp.  4-9.  These  all  refer  to  Australian  wool,  which,  as  Mr.  Hayes 
says  elsewhere  (ibid. ,  p.  107)*  is  imported  in  comparatively  small  quantities 
for  exceptional  purposes. 


212  HISTORY  OF  THE  EXISTING  TARIFF. 

may  fail  to  counterbalance  entirely  the  disadvantage 
under  which  the  manufacturer  labors  in  the  higher  price 
of  his  raw  material ;  for  the  wool,  being  imported  into 
this  country,  and  paying  the  duty,  must  be  higher  in  price 
by  the  full  amount  of  the  duty  than  the  same  wool  used 
by  the  foreign  producer.  In  other  words,  there  are  cases 
where  the  specific  duty  is  not  sufficient  to  offset  the  duty 
on  the  raw  material.  It  is  probable  that  this  fact  ex- 
plains, in  part  at  least,  the  regular  importation  of  certain 
dress  goods  and  finer  grades  of  cloths,  which  continue  to 
come  into  the  country  from  abroad  in  face  of  the  very 
heavy  duty.  But  such  cases  are  exceptional.  For  most 
goods  made  in  the  United  States  the  compensating  duty 
on  the  four  to  one  basis  is  excessive. 

One  other  provision  in  the  act  of  1867  may  be  pointed 
out,  which  bears  on  the  calculation  of  four  pounds  of  wool 
to  one  pound  of  cloth,  and  at  the  same  time  illustrates 
the  spirit  in  which  the  act  was  prepared.  It  has  already 
been  said  that  the  duty  on  wool  is  laid  on  unwashed  wool ; 
and  the  compensating  duty  is  fixed  on  the  calculation 
that  it  requires  four  pounds  of  unwashed  wool  to  make  a 
pound  of  cloth.  The  act  of  1867  provided  that  clothing 
wool,  if  washed,  should  pay  double  duty,  and  if  scoured, 
treble  duty.  Similarly  combing  wool  and  carpet  wool 
were  made  to  pay  treble  duty  if  scoured.  But  no  provi- 
sion whatever  was  made  as  to  combing  and  carpet  wools 
if  washed ;  they  were  admitted  at  the  same  rate  of  duty 
whether  washed  or  unwashed.     This  amounted  practically 


HOW  DUTIES  WERE  RAISED.  213 

to  a  lowering  of  the  duty  on  them.  The  same  wool  which 
would  weigh,  if  unwashed,  one  and  one  half  pounds,  and 
would  be  charged  with  a  duty  of  twenty  cents,  would 
weigh,  if  washed,  only  about  a  pound,  and  would  pay  a 
duty  of  only  thirteen  cents.  The  result  was  that  combing 
and  carpet  wool  was  advantageously  imported  in  a  washed 
condition,  and  the  duty  was  in  effect  appreciably  belowr  the 
rate  on  unwashed  wool.  Yet  the  compensating  duty  on 
carpets,  worsteds,  and  all  goods  made  from  these  wools 
was  arranged  as  in  the  case  of  cloths,  as  if  the  full  rate 
on  unwashed  wool  were  levied.  The  manufacturer  got 
the  full  compensating  rate  on  his  product,  though  he  did 
not  pay  the  full  duty  on  his  wool.  It  is  a  well-known 
fact  that  this  anomaly  in  the  act  of  1867  was  due  chiefly 
to  a  prominent  manufacturer  of  New  England,  whose 
business,  as  a  consequence,  was  made  exceedingly  profita- 
ble during  the  years  immediately  succeeding  the  passage 
of  the  act.1 

If,  as  we  have  seen  the  case  to  be,  the  compensating 
duty  was  very  liberal  in  the  case  of  ordinary  woollen 
cloth,  where  the  calculations  on  which  it  was  founded  can 
be  checked  with  comparative   ease,  it  is  to  be  expected 

1  The  act  of  18S3  maintains  without  change  the  admission  of  washed 
combing  wool  at  the  same  rates  of  unwashed.  The  great  profits  which  this 
state  of  things  enabled  certain  worsted  manufacturers  to  make  in  the  first 
instance,  have  been  brought  down  by  the  force  of  domestic  competition  ; 
and  a  considerable  industry  has  grown  up  on  the  basis  of  the  easy  admis- 
sion of  washed  wool.  It  would,  therefore,  hardly  be  wise  to  revert  from  it 
at  the  present  time.  But  its  insertion  in  the  original  act  is  very  characteris- 
tic of  the  spirit  in  which  the  compensating  scheme  was  devised. 


214  HISTORY  OF  THE  EXISTING  TARIFF. 

that  other  schedules,  where  a  check  is  more  difficult  to 
apply,  will  also  contain  excessive  compensation.  ?'he 
specific  duty  on  carpets  is  levied  by  the  yard  ;  that  on 
Brussels  carpets,  for  instance,  was  forty-four  cents  a  square 
yard.  Similarly  the  specific  duty  on  dress-goods  was 
levied  by  the  square  yard.  That  on  blankets,  flannels, 
worsteds,  yarns,  etc.,  was  fixed  by  the  pound,  but  was 
made  to  vary  from  twenty  to  fifty  cents  a  pound,  accord- 
ing to  the  value  of  the  goods.  The  last-mentioned  goods, 
for  instance,  paid  a  duty  of  twenty  cents  a  pound  if  worth 
forty  cents  or  less  a  pound ;  a  duty  of  thirty  cents  if 
worth  between  forty  and  sixty  cents  ;  and  so  on.  In 
every  case,  of  course,  the  ad-valorem  (nominally  protective) 
rate  of  thirty-five  per  cent,  was  added  to  the  specific 
duties.  It  is  evidently  a  very  complex  problem  whether 
these  "compensating"  duties  represent  the  exact  sum 
necessary  to  offset  the  increased  price  of  materials  due  to 
the  tariff  rates  •  on  wool,  hemp,  dye-stuffs,  and  other 
dutiable  articles  used  by  manufacturers.  We  have  seen 
that  the  movement  that  resulted  in  the  passage  of  the  act 
of  1867  was  brought  about  chiefly  by  the  manufacturers 
of  carpets  and  worsteds.  These  men  adjusted  the  specific 
duties,  and  alone  could  know  with  how  great  accuracy 
they  attained  their  object  of  compensation.  In  some  in- 
stances it  was  confessed  that  there  was  more  than  com- 
pensation in  their  scheme;  this  was  admitted  to  be  the 
case  with  blankets  and  dress-goods.  On  all  goods  it  is 
not   to  be  doubted  that  a  liberal  allowance  was  made  in 


HOW  DUTIES  WERE  RAISED.  21  5 

favor  of  the  manufacturers,  and  that  the  specific  rates 
gave  them  a  great  amount  of  pure  and  simple  protection. 
The  truth  is  that  the  wool  and  woollens  schedule,  as  it 
was  enacted  in  1867,  and  as  it  now  remains  in  The  woollens 
force  with  the  modifications  made  in  1883,  is  a  act  aheavy 

,  ^T        •      11       •  1  ••      protective 

great  sham.  Nominally,  it  makes  an  exact  di-  measure 
vision  between  protective  and  compensating  in  disguise, 
duties ;  and  nominally,  it  limits  the  protection  for  the 
manufacturer  to  twenty-five  (now  thirty-five)  per  cent. 
As  a  matter  of  fact,  no  one  can  tell  how  much  of  the 
different  duties  is  protective,  and  how  much  merely 
compensating.  So  complicated  is  the  schedule,  and  so 
varying  are  the  conditions  of  trade  and  manufacture,  that 
the  domestic  manufacturer  himself  finds  it  difficult  to  say 
exactly  how  great  a  degree  of  encouragement  the  govern- 
ment gives  him.  In  some  exceptional  cases  the  effectual 
protection  may  be  less  than  the  twenty-five  (now  thirty- 
five)  per  cent,  which  the  tariff  is  supposed  to  yield.  In 
the  great  majority  of  cases  it  is  very  much  more  than 
this,  and  was  meant  to  be  more.  The  whole  cumbrous 
and  intricate  system, — of  ad-valorem  and  specific  duties, 
of  duties  varying  according  to  the  weight  and  the  value 
and  the  square  yard, — was  adopted,  it  is  safe  to  say,  sim- 
ply because  it  concealed  the  degree  of  protection  which  in 
fact  the  act  of  1867  gave.  Duties  that  plainly  and  palpa- 
bly levied  taxes  of  60,  80,  and  100  per  cent,  would  hardly 
have  been  suffered  by  public  opinion  or  enacted  by  the 
legislature.     Probably   few  members  of  Congress   under- 


2l6  HISTORY  OF  THE  EXISTING  TARIFF. 

stood  the  real  nature  and  bearing  of  the  scheme ;  and  no 
attempt  was  made  to  check  the  calculations  of  the 
woollen  manufacturers,  or  to  see  whether,  intentionally  or 
by  accident,  abuses  might  not  have  crept  into  their  pro- 
posals. 

The   most    remarkable    fact    in    the    history   of    this 
piece   of   legislation   was  its   failure   to  secure 

Manu-        A  ° 

facturers  not  the  object  which  its  supporters  had   in  mind, 
benefited     Notwithstanding    the    very    great    degree    of 

by  the  act. 

protection  which  the  manufacturers  got,  the 
production  of  woollen  goods  proved  to  be  one  of  the 
most  unsatisfactory  and  unprofitable  of  manufacturing 
occupations.  As  a  rule,  a  strong  protective  measure 
causes  domestic  producers  to  obtain,  at  least  for  a  time, 
high  profits;  though  under  the  ordinary  circumstances  of 
free  competition,  profits  are  sooner  or  later  brought  down 
to  the  normal  level.  But  in  the  woollen  manufacture  even 
this  temporary  gain  was  not  secured  by  the  home  producers 
after  the  act  of  1867.  A  few  branches,  such  as  the  pro- 
duction of  carpets,  of  blankets,  of  certain  worsted  goods, 
were  highly  profitable  for  some  years.  These  were  the 
branches,  it  will  be  remembered,  in  which  the  compensa- 
ting duties  were  most  excessive,  and  the  prominent  manu- 
facturers engaged  in  them  had  done  most  to  secure  the 
passage  of  the  act  of  1867.  Profits  in  these  branches 
were  in  course  of  time  brought  down  to  the  usual  level, 
and  in  many  instances  below  the  usual  level,  by  the  in- 
crease of  domestic  production  and  domestic  competition. 


HOW  DUTIES    WERE  RAISED.  2\J 

The  manufacture  of  the  great  mass  of  woollen  goods, 
however,  was  depressed  and  unprofitable  during  the  years 
immediately  following  the  act,  notwithstanding  the  specu- 
lative activity  and  seeming  prosperity  of  that  time.1  It 
has  sometimes  been  said  that  this  was  the  effect  of  the 
act  itself ;  but  other  causes,  such  as  the  cessation  of  the 
the  war  demand  and  the  increasing  use  of  worsted  goods 
in  place  of  woollen  goods,  probably  suffice  to  account  for 
the  unprosperous  state  of  affairs.  It  has  also  been  said 
that  the  lack  of  diversity  in  the  woollen  manufacture  of 
the  United  States  can  be  traced  to  those  provisions  in 
the  act  of  1867  by  which  particularly  high  protection  was 
given  on  the  common  and  cheaper  goods  ;  the  more  so 
since  the  high  duty  on  wool  has  tended  to  hamper  the 
manufacturer  in  the  choice  of  his  material.  No  doubt  it 
is  true  that  at  present  the  majority  of  finer  woollen  goods 
are  imported,  and  the  manufacture  in  this  country  is 
confined  mainly  to  cheaper  grades.  The  situation  is  not 
essentially  different  from  that  which  we  have  already 
described  as  existing  before  i860.2  But  here  again  too 
much  is   ascribed,  for  good    or  evil,  to  the  tariff.     The 

1  See  an  instructive  article,  by  a  manufacturer,  in  "  Bulletin  Nat.  Assoc. 
Wool  Mf.,"  vol.  III.,  p.  354  (1872).  "There  is  one  thing  that  all  who  are 
interested  in  the  manufacture  will  agree  to,  that  for  the  last  five  years  [from 
1867  to  1872)  the  business  in  the  aggregate  has  been  depressed,  that  the 
profits  made  during  the  war  have  been  exhausted  mainly,  and  that  it  has 
been  extremely  difficult  during  all  this  time  to  buy  wool  and  mannfacture  it 
into  goods  and  get  a  new  dollar  for  an  old  one." — Cf.  Mr.  Harris'  pamph- 
lets, cited  above. 

2  See  above,  p.  147. 


2l8  HISTORY  OF    THE   EXISTING    TARIFF. 

limited  range  of  the  woollen  manufacturer  is  probably 
due  to  deeper  causes  ;  in  part  to  the  adaptability  of  the 
domestic  wool  for  making  the  woollen  goods  which  form 
the  staples  of  the  American  manufacture,  in  part  to  the 
fact  that  the  methods  and  machinery  for  those  goods  are 
fitted  to  our  economic  conditions.  The  causes,  in  fact, 
are  probably  analogous  to  those  which  have  confined  the 
cotton  manufacture  within  a  limited  range.  But,  on  the 
other  hand,  it  is  clear  that  the  act  of  1867  has  not  been 
successful  as  a  protective  measure  ;  it  has  not  stimulated 
the  woollen  industry  to  any  noticeable  degree,  nor  has  it 
greatly  affected  the  character  or  extent  of  the  imports. 
So  far  as  the  wool-growers  are  concerned,  it  has  not  pre- 
vented, the  price  of  wool  from  declining  in  the  United 
States,  in  sympathy  with  the  decline  elsewhere  ;  nor  has 
it  prevented  the  shifting  of  wool-growing  from  the  heart 
of  the  country  to  the  western  plains,  where  wool  is  raised 
under  conditions  like  those  of  Australia  and  the  Argen- 
tine Republic.  The  manufacture  probably  would  have 
been,  on  the  whole  and  in  the  long  run,  more  satisfactory 
to  those  engaged  in  it  if  they  had  had  free  wool  and  if 
woollens  had  been  charged  with  no  more  than  the  pro- 
tection of  25  per  cent,  which  the  act  of  1867  was  supposed 
to  give.1  Some  establishments,  no  doubt,  have  arisen 
which  could  not  continue  under  such  a  system,  and  for 
these  temporary  provisions  should  be  made  if  the  present 
duties  are  swept  away. 

1  This  statement  does  not  lack  the  authority  of  men  of  practical  experience  ; 
I  may  mention  Mr.  Rowland  Hazard,  of  Providence,  R.  I.,  a  large  manu- 


HOW  DUTIES  WERE  RAISED.  219 

The  woollens  act  of  1867  has  been  discussed  somewhat 
at  length  because  it  is  the  most  striking  illustration  of  the 
manner  in  which  protective  duties  were  advanced  after 
the  war  at  the  request  of  domestic  producers.  There  are 
not  a  few  other  cases  in  which  an  increase  of  duties 
beyond  the  level  reached  during  the  war  was  made. 
After  the  woollens  act,  perhaps  the  most  remarkable  is  the 
copper  act  of  1869.  Before  that  year  the  duty  CoDDeract 
on  copper  ore  had  been  five  per  cent.,  that  of  1869. 
on  copper  in  bars  and  ingots  had  been  two  and  a  half 
cents  per  pound.  Under  the  very  low  duty  on  copper 
ore  a  large  industry  had  grown  up  in  Boston  and  Balti- 
more. Ore  was  imported  from  Chili,  and  was  smelted 
and  refined  in  these  cities.  But  during  the  years  im- 
mediately preceding  1869  the  great  copper  mines  of 
Lake  Superior  had  begun  to  be  worked  on  a  considerable 
scale.  These  mines  are  probably  the  richest  sources 
of    copper    in    the    world,    and    under   normal    circum- 

facturer,  who  has  kindly  permitted  the  use  of  his  name  as  sanctioning  the 
text  on  this  point. 

It  is  not  part  of  the  object  of  this  volume  to  discuss  in  detail  the  economic 
effect  of  the  duties  on  wool  and  woollens.  The  reader  is  referred  to  a  dis- 
cussion of  the  original  scheme  in  Mr.  Wells's  "  Report  of  1866-67,"  PP-  5°- 
Co  ;  also  to  Mr.  Wells's  "  Report  for  1869-70,"  pp.  xcii-cv. ;  Wells,  "  Wool 
:  nd  the  Tariff"  (1873);  Harris,  "Memorial  to  Committee  on  Ways  and 
Means"  (1872);  Schoenhof,  "Wool  and  Woolens"  (1883);  R.  Hazard, 
"Address  before  the  Washington  County  Agr.  Society"  (1884).  On  the 
other  side,  see  Bulletin  Wool  Manufacturers,  vol.  ii.,  pp.  19-34,  in 
reply  to  Wells's  remarks  in  1870  ;  "  Examination  of  Statements  in  the  Report 
of  the  Revenue  Commissioner,"  House  Rep.,  41st  Congress,  2d  session, 
Report  No.  72  (1869-70)  ;  Bulletin  Wool  Mfr.,  vol,  xiii.,  p.  1-13  ;  "  Tariff 
Comra.  Report,"  pp.  2240-47,  241 1-2440. 


220  HISTORY  OF  THE  EXISTING  TARIFF. 

stances  would  supply  the  United  States  with  this  metal 
more  cheaply  and  abundantly  than  any  other  country  ; 
yet  through  our  tariff  policy  these  very  mines  have 
caused  us  for  many  years  to  pay  more  for  our  copper 
than  any  other  country.  The  increased  production  from 
these  mines,  with  other  circumstances,  had  caused  copper 
to  fall  in  price  in  1867  and  1868;  and  their  owners  came 
before  Congress  and  asked  for  an  increase  of  duties.  Cop- 
per ore  was  to  pay  three  cents  for  each  pound  of  pure  cop- 
per, equal  to  twenty-five  or  thirty  per  cent.,  in  place  of  the 
previous  duty  of  five  per  cent. ;  and  ingot  copper  was  to 
pay  five  cents  per  pound,  instead  of  two  and  a  half  cents. 
The  bill  making  these  changes  was  passed  by  both  houses. 
President  Johnson  refused  to  sign  it,  and  sent  in  a  veto 
message,  which  bore  marks  of  having  been  composed  by 
other  hands  than  his  own.  But  the  President  was  then  per- 
haps the  most  unpopular  man  in  the  country ;  Congress 
had  got  a  habit  of  overriding  his  vetoes,  and  the  copper  bill 
was  passed  in  both  Houses  by  the  necessary  two-thirds 
vote,  and  became  law.1     A  more  open  use  of  legislation 

1  The  veto  message  is  in  Congress.  Record,  1868-69,  p.  1460.  It  was 
written  by  Mr.  David  A.  Wells,  as  that  gentleman  has  informed  the  writer. 
The  character  of  the  bill  was  made  clear  enough  in  the  course  of  the  debate, 
at  well  as  by  the  veto  message.  See  Brooks's  speech,  ibid.,  p.  1462.  The 
manner  in  which  this  bill,  and  others  of  the  same  kind,  were  carried  through 
Congress  is  illustrated  by  some  almost  naive  remarks  of  Mr.  Frelinghuysen  : 
"  My  sympathies  are  with  this  bill,  as  they  always  are  for  any  tariff  bill.  I 
confess,  however,  that  I  do  not  like  this  system  of  legislation,  picking  out 
first  wool,  then  copper,  then  other  articles,  and  leaving  the  general  manu- 
facturing interests  without  that  protection  to  which  they  are  entitled,  and 
thus  dividing  the  strength  which  those  great  interests  ought  to  have.     But 


HOW  DUTIES  WERE  RAISED.  221 

for  the  benefit  of  private  individuals  has  probably  never 
been  made.  The  effect  of  the  act  was,  in  the  first  place, 
to  destroy  the  smelting  establishments  which  had  treated 
the  Chilian  ores.  In  the  second  place,  it  enabled  the 
copper  producers  at  home  to  combine  and  to  settle  the 
price  of  their  product  without  being  checked  by  any  pos- 
sible foreign  competition.  It  is  a  well-known  fact  that 
the  mining  companies  of  Lake  Superior,  which  controlled 
until  within  a  year  or  two  almost  the  entire  production  of 
copper  in  the  United  States,  have  maintained  for  many 
years  a  combination  for  fixing  the  price  of  copper.  Their 
price  has  been  steadily  higher  than  the  price  of  copper 
abroad ;  and  when  they  have  found  it  impossible  to  dis- 
pose of  all  their  product  at  home  at  the  combination 
price,  large  quantities  have  been  sent  abroad  and  sold 
there  at  lower  prices,  in  order  to  relieve  the  home  market. 
Several  of  these  companies  have  paid  for  a  series  of  years 
enormous  profits — profits  due  in  part,  no  doubt,  to  the 
unsurpassed  richness  of  their  mines,  but  in  part  also  to  the 
copper  act  of  1869.1 

Still  another  instance  of  the  increase  of  duties  since  the 
war  is  to  be  found  in  the  case  of  steel  rails.  Before  1870 
steel  rails  had  been  charged  with  duty  under  the  head  of 

still,  if  a  bill  is  introduced  which  gives  protection  to  copper,  trusting  to  the 
magnanimity  of  the  Representatives  from  the  West  who  have  wool  and  cop- 
per protected,  I  should  probably  vote  for  the  bill." — Ibid.,  p.  161. 

1  On  the  effect  of  the  copper  act,  see  Mr.  Wells's  Essay,  already  referred 
to,  in  the  Cobden  Club  series,  pp.  518-521  Cf.  the  "Report  of  the  Tariff 
Comm.,"  pp.  2554-2577.  See  also  Appendix,  V.,  where  the  total  pro- 
duction of  copper  in  each  year,  prices  at  home  and  abroad,  etc.,  are  given. 


222  HISTORY  OF  THE  EXISTING  TARIFF. 

"  manufacturers  of  steel  not  otherwise  provided  for,"  and 

Steel  rails,    as   such   had   paid    forty-five    per   cent.      The 

1870.       tarift   act  Qf    jg^0  change(j  tnjs  to  a  specific 

duty  of  \\  cents  per  pound,  or  $28  per  gross  ton. 
At  the  time,  the  change  caused  an  increase,  but  no 
very  great  increase,  in  the  duty.  The  Bessemer  process 
of  making  steel  had  hardly  begun  to  be  used  in  1870, 
and  the  price  of  steel  rails  at  that  time  in  England 
was  about  $50  per  ton.  The  ad-valorem  rate  of  forty- 
five  per  cent.,  calculated  on  this  price,  would  make  the 
duty  $22.50  per  ton,  or  not  very  much  less  than  the  duty 
of  $28  per  ton  imposed  by  the  act  of  1870.  Between 
1870  and  1873,  the  price  of  steel  rails  advanced  in  Eng- 
land, and  the  specific  duty  of  $28  imposed  in  the  former 
year  was  not  higher  than  the  ad-valorem  rate  of  forty-five 
per  cent,  would  have  been.  But  after  1873  the  prices  of 
Bessemer  steel  and  of  steel  rails  steadily  went  down.  As 
they  did  so,  the  specific  duty  became  heavier  in  propor- 
tion to  the  price.  By  1877  the  average  price  of  steel  rails 
in  England  was  only  a  little  over  $31  per  ton  ;  and  since 
1877  the  English  price  has  not  on  the  average  been  so 
high  as  $28  per  ton.  The  duty  of  $28,  which  this  country 
imposed,  has  therefore  been  equivalent  to  more  than  one 
hundred  per  cent  on  the  foreign  price.  The  result  of  this 
exorbitant  duty  was  an  enormous  gain  to  the  producers  of 
steel  rails  in  the  United  States.  The  patent  for  the  use  of 
the  Bessemer  process  was  owned  by  a  comparatively  small 
number  of  companies  ;  and  these  companies,  aided  by  a 


HOW  DUTIES  WERE  RAISED.  223 

patent  at  home  and  protected  by  an  enormous  duty 
against  foreign  competitors,  were  enabled  for  a  time  to  ob- 
tain exceedingly  high  prices  for  steel  rails.  During  the 
great  demand  for  railroad  materials  which  began  on  the 
revival  of  business  in  1879,  an<^  continued  for  several 
years  thereafter,  the  prices  of  steel  rails  were  advanced  so 
high  that  English  rails  were  imported  into  this  country 
even  though  paying  the  duty  of  one  hundred  per  cent. 
During  this  time  the  price  in  England  was  on  the  average 
in  1880  about  $36  per  ton,  and  in  188  r  about  $31  per  ton. 
In  this  country  during  the  same  years  the  price  averaged 
$67  and  $61  per  ton.  That  is,  consumers  in  this  country 
were  compelled  to  pay  twice  as  much  for  steel  rails  as 
they  paid  in  England.  Any  thing  which  increases  the 
cost  of  railroad-building  tends  to  increase  the  cost  of 
transportation  ;  and  a  tax  of  this  kind  eventually  comes 
out  of  the  pockets  of  the  people  in  the  shape  of  higher 
railroad-charges  for  carrying  freight  and  passengers.  The 
domestic  producers  of  steel  rails  secured  enormous  profits, 
of  one  hundred  per  cent,  and  more  on  their  capital,  during 
these  years.  These  profits,  as  is  always  the  case,  caused 
a  great  extension  of  production.  The  men  who  had 
made  so  much  money  out  of  Bessemer  steel  in  1879-81 
put  this  money  very  largely  into  establishments  for 
making  more  steel.  New  works  were  erected  in  all  parts 
of  the  country.  At  the  same  time  the  demand  fell  off, 
in  consequence  of  the  check  to  railroad-building;  and  the 
increased    supply,   joined  to  the   small   demand,   caused 


224  HISTORY  OF  THE  EXISTING  TARIFF. 

prices  here  to  fall  almost  to  the  English  rates.  But 
during  the  years  of  speculation  and  railroad-building  the 
tariff  had  yielded  great  gains  to  makers  of  steel  rails  ;  and 
popular  feeling  against  this  state  of  things  was  so  strong 
that  in  1883  Congress  felt  compelled,  as  we  shall  see,  to 
make  a  considerable  reduction  in  the  duty.1 

Still  another  case,  and  one  which  bears  some  resem- 
Marble  iS6a  Glance  to  the  woollen  act  of  1867,  is  to  be 
and  1870.  found  in  the  change  of  the  duty  on  marble, 
which  was  made  in  1870.  The  duty  on  marble  had 
been  put  in  1864  at  fifty  cents  per  cubic  foot,  and 
twenty  per  cent,  in  addition.  This,  it  may  be  remarked, 
is  one  of  the  not  infrequent  cases  in  which  our  tariff 
has  imposed,  and  still  imposes,  both  ad-valorcm  and 
specific  duties  on  the  same  article.  No  compensating 
principle,  such  as  is  found  in  the  woollen  schedule,  ex- 
plains most  of  these  mixed  duties ;  and  it  is  hard  to 
find  any  good  reason  for  retaining  them,  and  giving  the 
customs  authorities  the  task  of  assessing  the  duty  both 
on  value  of  the  article  and  on  its  weight  or  measure. 
The  cause  of  their  retention,  there  can  be  little  doubt,  is 
that  they  serve  to  conceal  the  real  extent  of  the  duties 
imposed.  The  duty  on  marble,  for  instance,  had  been 
thirty  per  cent,  in  1 861,  and  had  been  raised  to  forty  per 

1  The  effect  of  the  steel-rail  duty  is  discussed  more  in  detail  in  Mr.  J. 
Schoenhof's  "  Destructive  Influence  of  the  Tariff,"  ch.  vii.  On  the  profits 
made  by  the  manufacturers,  see  Mr.  A.  S.  Hewitt's  speech  in  Congress, 
May,  16,  1882,  Congress.  Record,  pp.  3980-83  ;  also  printed  separately. 
Cf.  infra,  p.  94,  and  figures  of  production,  prices,  etc.  in  Appendix,  VI. 


HO W  DUTIES  WERE  RAISED.  225 

cent,  in  1862.  The  mixed  duty  put  on  in  1864  was 
equivalent  to  eighty  per  cent,  and  more.1  A  direct  in- 
crease of  the  duty  from  forty  to  eighty  per  cent,  would 
hardly  have  been  ventured  on ;  but  the  adoption  of  the 
mixed  duty  veiled  the  change  which  was  in  fact  made. 
One  would  have  supposed  that  this  rate  of  eighty  per 
cent,  would  have  sufficed  even  for  the  most  ardent  sup- 
porter of  home  industries;  but  in  1870  a  still  further 
increase  was  brought  about.  It  was  then  enacted  that 
marble  sawed  into  slabs  of  a  thickness  of  two  inches  or 
less  should  pay  twenty-five  cents  for  each  superficial 
square  foot,  and  thirty  per  cent,  in  addition  ;  slabs  be- 
tween two  and  three  inches  thick  should  pay  thirty-five 
cents  per  square  foot,  and  thirty  per  cent. ;  slabs  between 
three  and  four  inches  thick  should  pay  forty-five  cents 
per  square  foot,  and  thirty  per  cent.;  and  so  on  in  propor- 
tion. Marble  more  than  six  inches  thick  paid  at  the  old 
rate  of  fifty  cents  per  cubic  foot,  and  twenty  per  cent.  It 
is  evident  that  the  change  made  in  the  duty  on  marble  in 
slabs  caused  a  great  increase.  The  duty  on  the  thinnest 
slabs  (two  inches  or  less  in  thickness)  became  $1.50  per 
cubic  foot,  and  thirty  per  cent,   in   addition  ;  this  same 

1  The  duty  of  1864  was  fixed,  as  Mr.  Morrill  then  explained,  in  accord- 
ance with  an  arrangement  made  between  the  importing  merchants  and  "  the 
gentlemen  in  Washington  in  the  marble-quarry  interest. "  The  latter  were 
Mr.  Morrill's  constituents.  It  did  not  seem  to  occur  to  that  gentleman  that 
the  persons  who  were  to  pay  for  the  marble  should  be  regarded  at  all. 
Originally  Mr.  Morrill  had  even  proposed  a  duty  of  seventy-five  cents  per 
cubic  yard,  with  twenty  per  cent,  in  addition.  See  Congr,  Globe,  1863-64, 
pp.  2746-2747. 


226  HISTORY  OF  THE  EXISTING  TARIFF. 

marble  had  hitherto  been  admitted  at  fifty  cents  per 
cubic  foot,  and  twenty  per  cent.  The  new  rates  of  1870 
have  been  equivalent  to  between  100  and  150  per  cent,  on 
the  value,  and  have  been  practically  prohibitive.  The 
effect  of  the  marble  duty  and  of  the  change  made  in  it  in 
1870  can  be  understood  only  by  those  who  know  the  cir- 
cumstances under  which  marble  is  produced  and  imported 
in  this  country.  The  only  marble  imported,  and  that 
which  alone  is  affected  by  the  duty,  is  fine  marble  used 
for  ornamental  purposes  in  mantel-pieces,  furniture,  grave- 
stones, etc.  Such  marble  comes  into  use  very  largely  in 
the  shape  of  slabs  of  a  few  inches  in  thickness.  The 
marble  is  imported,  notwithstanding  the  heavy  duty,  from 
Italy,  whence  it  is  brought  cheaply  by  ships  that  have 
taken  out  grain  and  other  bulky  cargoes.  It  is  produced 
in  the  United  States  in  a  single  district  in  Vermont.  The 
owners  of  the  marble  quarries  in  this  district  have  their 
product  raised  in  price  almost  to  the  extent  of  the  duty  of 
eighty  or  150  per  cent.  The  result  has  been  to  make 
these  quarries  very  valuable  pieces  of  property,  and  to  put 
very  handsome  profits  into  the  pockets  of  their  owners  ; 
profits  which  represent  practically  so  much  money  which 
Congress  has  ordered  those  who  use  ornamental  marble 
to  pay  over  to  the  quarry-owners.1 

Wool  and  woollens,  copper,  steel  rails,  marble,  which  we 
have  now  considered,  are  sufficient  examples  of  the  man- 

1  In  regard  to  the  duty  on  marble,  see  "  Tariff  Commission  Report,"  pp. 
227,  1560,  1648. 


HOW  DUTIES  WERE  RAISED.  227 

ner  in  which  duties,  already  raised  to  high  figures  during 
the  war,  were  still  further  increased  after  the  war,  for 
the  benefit  of  the  domestic  producers.  Other  instances 
could  be  given  in  which  an  equal  disregard  Qther 
of  the  consumer  and  taxpayer  has  been  examples, 
:,hown.  The  duty  on  flax,  the  raw  material 
of  a  manufacture  not  over-prosperous,  had  been  $15  per 
ton  in  1864;  in  1870  it  was  raised  to  $20  on  undressed 
flax,  and  to  $40  on  dressed  flax.  Nickel  had  been 
admitted  free  of  duty  in  1861,  and  had  paid  only  fifteen 
per  cent,  by  the  act  of  1864.  In  1870  the  duty  was  sudr 
enly  made  thirty  cents  per  pound,  or  about  forty  per 
cent,  on  the  value.  Nickel,  like  marble,  is  produced  in 
only  one  locality  in  this  country.  There  exists  a  single 
nickel  mine,  in  Pennsylvania,  owned  by  a  well-known  ad- 
vocate of  protection,  and,  with  the  aid  of  the  tariff,  this 
mine,  doubtless,  has  yielded  the  owner  very  handsome  re- 
turns.1    Examples  need  not  be  multiplied.     Enough  has 

1  Mr.  Joseph  Wharton,  of  Philadelphia,  is  the  owner  of  the  nickel  mine. 
Mr.  Wharton  has  also  been  largely  interested  in  Bessemer  steel-works.  There 
can  be  no  impropriety  in  mentioning  his  name,  as  he  has  publicly  advocated 
not  only  the  general  doctrine  of  protection,  but  also  the  retention  of  the 
duties  on  nickel  and  steel.  See  "Tariff  Com.  Report,"  pp.  201-204  ;  and 
ibid. ,  2  rg,  393,  in  regard  to  the  effect  of  the  duty  on  nickel.  Cf.  Mr.  Wharton's 
pamphlet,  "  The  Duty  on  Nickel,"  Philadelphia,  1883  ;  and  Mr.  D.  A.  Wells's 
remarks  on  this  pamphlet  in  Princeton  Review,  July,  1883,  pp.  8-1 1.  Sec 
also  "Mineral  Resources  of  the  United  States,"  p.  405.  Mr.  Wharton  is 
the  founder  of  the  Wharton  School  of  Finance  and  Economy,  in  Philadel- 
phia, in  which  protectionist  doctrines  are  taught.  Indeed,  Mr.  Wharton, 
when  giving  the  money  for  founding  the  school,  stipulated  that  the  profes- 
sors should  teach  "how,  by  suitable  tariff  legislation,  a  nation  *■  *  *  may 
keep  its  productive  industry  alive,  cheapen  the  cost  of  commodities,  and 


228  HISTORY  OF  THE  EXISTING  TARIFF. 

been  said  to  show  how  the  tendency  toward  high  duties, 
which  was  caused  by  the  war,  continued  after  the  war 
ceased,  and  how  this  tendency  was  taken  advantage  of 
by  the  home  producers  in  order  to  obtain  a  degree  of 
protection  which,  under  ordinary  circumstances,  they 
would  not  have  dreamed  of  asking. 

No    excuse    can    be    found    for    the     great    increase 
of    duties   on  wool   and  woollens,  on  copper, 

Character  of 

these  and  on  the  other  articles  which  have  been 
measures,  dealt  with  in  the  present  chapter.  That  duties 
were  greatly  increased  during  the  course  of  the  war,  and 
in  many  cases  increased  wantonly  and  unnecessarily, 
may  be  explained  and  in  some  degree  excused  by  the 
imperative  need  of  heavy  taxation  at  that  time,  and 
by  the  impossibility  of  avoiding  mistakes  and  incongrui- 
ties in  the  hurried  passage  of  a  complicated  mass  of 
legislation.  The  retention  of  these  war  taxes,  heavy 
and  often  exorbitant  as  they  were,  for  twenty  years 
after  the  occasion  for  them  had  passed,  is  not  indeed  to 
be  defended,  but  it  may  be  reasonably  explained.  The 
pressure  of  other  problems,  the  fear  of  infringing  on 
vested  rights  and  interests,  the  powerful  opposition  which 
is  always  met  in  withdrawing  public  bounty  when  once  it 
has  been  conferred,  may  explain  the  failure  to  reduce  the 
war  duties  on  grounds  which,  if  not  sufficient,  are  at  least 
not  unbecoming  to  our  public  life.     But  for  the  additions 

oblige  foreigners  to  sell  it  at  low  prices,  while  contributing  largely  toward 
defraying  the  expense  of  its  government."  The  quotation  is  from  the  letter 
of  gift. 


HOW  DUTIES  WERE  RAISED.  22$ 

to  the  protective  system  that  were  made  by  measures  like 
the  woollens  act  of  1867  and  the  copper  act  of  1869,  no 
explanation  can  be  given  that  does  not  reflect  in  some 
degree  on  the  good  name  and  the  good  faith  of  the 
national  legislature.  Such  measures  can  be  accounted  for 
only  when  we  call  to  mind  that  our  public  life  was 
demoralized  during  the  years  immediately  following  the 
war ;  that  jobs  were  plenty  and  lobbyists  powerful ;  that 
some  Congressmen  thought  it  not  improper  to  favor 
legislation  that  put  money  into  their  own  pockets,  and 
many  thought  it  quite  proper  to  support  legislation  that 
put  money  into  the  pockets  of  influential  constituents. 
The  measures  which  we  have  been  considering  were  by  no 
means  the  most  conspicuous  or  the  worst  results  of  this 
state  of  things.  Bribery,  direct  or  indirect,  is  not  likely  to 
have  been  used  to  affect  tariff  provisions  ;  it  certainly  can 
have  had  little  influence  on  legislation.  Contributions 
to  the  party  chest  are  the  form  in  which  money  payments 
by  the  protected  interests  are  likely  to. have  been  made,  so 
far  as  such  payments  were  made  at  all.  But  the  general 
laxity  of  thought  on  public  trusts  undoubtedly  made 
possible  the  manipulation  of  the  tariff  in  the  interest 
of  private  individuals.  The  tone  of  political  life,  as 
indeed  that  of  commercial  life,  was  lowered  by  the 
abnormal  economic  conditions  that  followed  the  war; 
and  the  general  demoralization  enabled  the  protected 
interests  and  their  champions  to  rush  through  Congress 
measures  which,  in  a  more  healthy  state  of  public  affairs, 
would  have  been  reprobated  and  rejected. 


CHAPTER   IV. 

THE  TARIFF   ACT  OF    1 883. 

In  the  preceding  chapters  the  tariff  has  been  discussed 
independently  of  the  act  of  1883.  That  act,  aside  from 
the  abortive  horizontal  reduction  of  1872,  made  the  first 
general  revision  since  the  Civil  War.  It  has  been  as- 
sumed, in  our  discussion  of  the  legislation  previous  to 
1883,  that  the  revision  was  not  so  complete,  and  the 
change  made  in  the  course  of  it  not  sufficiently  great,  to 
affect  the  substantial  truth  of  the  statement  that  the  war 
duties  are  still  retained  as  the  basis  of  our  tariff  system. 
It  remains  to  justify  this  assumption  by  examining  in 
some  detail  the  act  of  1883. 

The  history  of  the  passage  of  the  act  is  so  recent  and 
familiar  that  only  the  salient  events  need  be  recalled. 
After  the  crisis  of  1873  little  or  nothing  was  heard  for  a 
while  about  the  tariff  ;  and  so  habituated  had  the  public 
become  to  the  extreme  protective  regime  that  the  demand 
for  its  reform  met  with  little  support.  The  subject  was 
again  made  prominent,  after  having  attracted  little  atten- 
tion for  several  years,  by  the  redundant  revenue  which  was 
the  consequence  of  the  revival  of  trade  in  1879  anc^  tne 
subsequent  years.     The  connection  between  tariff  legisla- 

230 


THE  TARIFF  ACT  OF   1 883.  23  I 

tion  and  the  state  of  the  revenue  has  indeed  been  curi- 
ously constant  in  our  history.  In  1842  an  empty  treasury 
was  followed  by  the  passage  of  a  high  protective  tariff. 
In  1857  an  overflowing  revenue  caused  a  reduction  of  the 
duties.  In  1861  the  Morrill  tariff  was  passed,  partly  in 
order  to  make  good  a  deficit.  During  the  war  the  need 
of  money  alone  made  possible  the  act  of  1864.  The 
ten  per  cent,  reduction  of  1872  was  called  out  Agitation 
largely  by  the  redundant  revenue ;  its  abolition  on  the  tariff 
in  1875  was  excused  by  the  falling  off  in  the 
government  income.  In  recent  years  the  surplus  has 
been  on  the  average  about  a  hundred  millions  a  year,1 
and  the  demand  for  a  reduction  in  the  tariff  rates  has 
become  steadily  stronger. 

In  1882  a  protectionist  Congress  passed  an  act  for 
the  appointment  of  a  Tariff  Commission,  Tariff 
which  was  to  report  at  the  next  session  of  Commission 
Congress  what  changes  it  thought  desirable. 
Of  the  gentlemen  appointed  by  the  President  on  this 
commission  a'  majority  were  advocates  of  high  protec- 
tion ;  while  no  member  could  be  said  to  represent  that 
part  of  the  public  which  believed  a  reduction  of  the 
protective   duties  to  be  desirable.     Mr.  John  L.   Hayes, 

1  The  surplus,  after  paying  all  expenses  and  interest  on  the  public  debt, 
was  : 

In  the  fiscal  year  1880 $65,883,000 

•'  "  1881  .         .         .         .         .  100,069,000 

%    "  "  1882 145,543,000 

M  "  1883 132,879,000 

"  "  1884  .         .         .         .         .         104,393,000, 

(under  the  act  of  1883). 


232  HISTORY  OF  THE  EXISTING  TARIFF. 

the  secretary  of  the  Wool  Manufacturers'  Association, 
was  president  of  the  commission.  Its  report  was  laid 
before  Congress  at  the  beginning  of  the  session  of  1882-83. 
At  first  no  action  on  this  report  or  on  the  tariff  seemed 
likely  to  be  taken  ;  for  the  House,  in  which  revenue  bills 
must  originate,  was  unable  to  agree  on  any  bill.  But  the 
House,  having  passed  a  bill  for  the  reduction  of  some  of 
the  internal  taxes,  the  Senate  tacked  to  this  bill,  as  an 
amendment,  a  tariff  bill  based,  in  the  main,  on  the  recom- 
mendations of  the  Tariff  Commission.  When  this  bill 
came  before  the  House  the  protectionists  again  succeeded, 
as  in  1872,  in  obtaining  a  parliamentary  victory.  By  an 
adroit  manoeuvre  they  managed  to  have  it  referred  to  a 
conference  committee.1  In  this  committee  the  details  of 
the  tariff  act  were  finally  settled  ;  for  the  bill,  as  reported 

1  This  manoeuvre  was  a  curious  example  of  the  manner  in  which  the  rules 
of  Congress  are  manipulated  in  order  to  affect  legislation.  A  two-thirds 
vote,  by  the  existing  rules,  was  required  to  bring  the  Senate  bill  before  the 
House.  A  two-thirds  majority  in  favor  of  the  bill  could  not  be  obtained  ; 
though  it  was  probable  that  on  a  direct  vote  a  majority  in  its  favor  could  have 
been  got.  The  protectionists  wished  to  have  the  bill  referred  to  a  confer- 
ence committee,  which  would  probably  act  in  the  direction  desired  by  them. 
For  this  purpose  a  resolution  was  introduced  by  Mr.  Reed,  of  Maine,  pro- 
viding for  a  new  rule  of  the  House,  by  which  a  bare  majority  was  to  have 
power  to  take  up  a  bill  amended  by  the  Senate  for  the  purpose  of  non-con- 
currence in  the  Senate  amendments,  but  not  for  the  purpose  of  concurrence. 
By  the  passage  of  this  rule  a  majority  of  the  House  could  take  up  the  tariff 
bill,  and  then  refuse  to  concur  in  the  Senate  amendments  ;  but  under  this 
rule  the  amendments  could  not  be  concurred  in.  There  was,  consequently, 
no  possibility  of  passing  the  tariff  bill  in  the  shape  in  which  it  came  from  the 
Senate.  The  bill  had  to  be  referred  to  a  conference  committee  ;  and  in  that 
committee,  as  the  text  states,  the  details  of  the  bill  were  settled.  The  Reed 
rule,  though  made  a  permanent  rule  of  the  House,  was  passed  merely  in  order 
to  attain  this  object. 


THE  TARIFF  ACT  OF  1 883.  233 

to  the  Senate  and  House  by  the  conferees  of  the  two 
bodies,  was  passed  by  them  and  became  law.  Act  of  1883; 
The  object  of  the  manoeuvre  was  to  check  the  how  passed, 
reduction  of  duties  as  it  appeared  in  the  Senate  bill ; 
and  this  object  was  attained.  The  changes  made  by  the 
conference  committees  were,  as  a  rule,  in  a  protectionist 
direction.  -  The  duties  on  a  number  of  articles  were 
raised  by  the  committee  above  the  rates  of  the  Sen- 
ate bill,  and  even  above  the  rates  which  the  House 
had  shown  a  willingness  to  accept.  The  consequence 
was  that  the  tariff  act,  as  finally  passed,  contained  a 
much  less  degree  of  reduction  than  the  original  Senate 
bill ;  and  it  was  passed  in  the  Senate  only  by  a  strict 
party  vote  of  32  to  31,  while  the  original  Senate  bill 
had  been  passed  by  a  vote  of  42  to  19.1 

1  Mr.  Morrison  said,  in  the  last  session  of  Congress  (1883-84),  in  com- 
menting on  the  act  of  1883  ■  M  The  office  and  duty  of  a  conference  commit- 
tee is  to  adjust  the  difference  between  two  disagreeing  Houses.  This  House 
had  decided  that  bar-iron  of  the  middle  class  should  pay  $20  a  ton  ;  the 
Senate  that  it  was  to  pay  $20.16  a  ton.  The  gentlemen  of  the  conference 
committee  reconciled  this  difference — how  ?  By  raising  bar-iron  [of  this 
class]  above  both  House  and  Senate  to  $22.40  a  ton.  The  Tariff  Commis- 
sion reported  that  the  tariff  on  iron  ore  should  be  50  cents  a  ton.  The 
Senate  said  it  should  be  50  cents  a  ton.  The  House  said  it  should  be  50 
cents  a  ton.  Gentlemen  of  the  conference  committee  reconciled  the  agree- 
ment of  the  House,  Senate,  and  Tariff  Commission  into  a  disagreement,  and 
made  the  duty  on  iron  ore  75  cents  a  ton.  The  gentlemen  of  the  confer- 
ence did  a  similar  service  for  the  great  corporation  of  corporations,  the  Iron 
and  Steel  Association,  by  giving  it  a  tax  of  $17  on  steel  rails,  which  the 
House  had  fixed  at  $15  and  the  Senate  at  $15.68  per  ton."  Quoted  in  Nel- 
son's *'  Unjust  Tariff  Law,"  pp.  22,  23.  Cf.  remarks  to  the  same  effect  by 
Senator  Beck,  who  was  a  member  of  the  conference  committee. — Cong. 
Record,  1883-84,  p.   2786. 

The  conferees  for  the  Senate  were  Messrs.   Morrill,  Sherman,  Aldrich, 


234  HISTORY.  OF  THE  EXISTING  TARIFF. 

In  taking  up  the  provisions  of  the  act  of  1883/  it 
will  be  best  to  consider  first  those  cases  in  which  an 
increase  in  the  duties  has  been  made.  For,  unex- 
pected as  it  may  be  to  the  reader  of  the  preceding 
pages,  the  act  of  1883  contains  a  number  of  sections 
in  which  protective  duties  have  been  advanced  above 
Duties  ^e  rates  °f  preceding  acts ;  and  these  sec- 
raised  in  tions  are  very  instructive  when  we  try  to 
make  out  the  general  character  of  the  new 
act.  To  begin  with,  the  duties  on  certain  classes  of 
woollen  goods  have  been  raised.  On  most  woollens 
the  figures  have  been  lowered ;  though,  as  will  be  seen, 
the  reduction  in  these  cases  has  not  been  such  as  to 
bring  any  benefit  to  consumers.  But  on  certain  classes 
of  woollens,  on  which  a  reduction  of  duty,  if  made, 
would  have  been  of  benefit  to  consumers,  the  duties 
have  not  been  reduced,  but  advanced.  This  is  the  case 
Woollen  with  dress  goods  made  wholly  of  wool.  Under 
dress  goods.  t^e  act  0f  jg5^  suc\i  goods  had  paid  a  maxi- 
mum duty  of  eight  cents  per  yard  and  forty  per  cent. 
It  will  be  observed  that  the  forty  per  cent,  rate  on  these 
goods  had  already  been  above  the  general  ad-valorem  duty 

Bayard,  and  Beck  ;  for  the  House,  Messrs.  Kelley,  McKinley,  Haskell, 
Randall,  and  Carlisle.  All  but  three  (Bayard,  Beck,  and  Carlisle)  were 
strong  protectionists. 

1  In  the  appendix,  VII.,  the  reader  will  find  a  table  giving  in  detail  the 
old  duties,  those  recommended  by  the  Tariff  Commission,  and  those  now  in 
force,  on  all  articles  mentioned  in  this  chapter.  In  the  document  entitled 
"  Tariff  Compilation,"  printed  by  the  Senate  in  1884,  a  complete  list  of  the 
old  and  new  duties  is  given. 


THE  TARIFF  ACT  OF  1 883.  235 

of  thirty-five  per  cent,  established  by  the  act  of  1867. 
Nevertheless  the  act  of  1883  increased  the  duty  on  these 
goods  to  nine  cents  a  yard  and  forty  per  cent.  The  Tariff 
Commission  had  even  recommended  twelve  cents  a  yard 
and  forty  per  cent.  Goods  of  this  class  form  the  largest 
single  item  in  the  importations  of  woollens  into  the  United 
States.  They  are  made  to  no  very  great  extent  by  the 
domestic  manufacturers.  The  new  duty  is  intended  to 
enable  the  latter  to  engage  profitably  in  making  them  ; 
since  the  old  duty,  though  it  amounted  in  all  to  more 
than  sixty-five  per  cent,  on  the  values  of  the  imports,  had 
not  sufficed  for  this  purposes  No  pretence  was  made 
that  this  increase  in  the  specific  duty  was  necessary  to 
give  more  effective  compensation  for  the  wool  duty ;  in 
fact,  as  we  shall  see,  the  duty  on  wool  was  slightly 
lowered,  so  that  the  compensating  duty,  if  changed  at  all, 
should  have  gone  down.  The  new  duty  was  simply  a 
concession  to  the  demand  of  the  manufacturers  for  still 
further  protection  on  one  of  the  few  articles  on  which 
the  previous  rates  had  still  permitted  foreign  competi- 
tion.1 

Next  to  dress  goods,  such  as  were  discussed  in  the 
preceding    paragraph,    the    class   of   woollens    of    which 

1  The  Tariff  Commission,  in  its  "  Report"  (p.  31),  says:  "The  new- 
clause  in  relation  to  all-wool  merino  goods  is  a  new  provision,  and  has  in 
view  the  introduction  of  fabrics  never  yet  successfully  made  in  this  country. 
Many  of  these  goods  constitute  staple  fabrics  *  *  *  and  their  manufac- 
ture would  be  a  desirable  acquisition  to  our  national  industry."  C/.,  on  the 
whole  of  the  new  system  of  wool  and  woollen  duties,  two  articles  in  Bulletin 
Wool Mf.,  xiii.,  1-13,  89-128. 


236  HISTORY  OF  THE  EXISTING  TARIFF. 

the   importations   are    largest    are    the    finer    grades    of 

cloths  and  cassimeres.     The  importation  of  these  goes  on 

Woollen     steadily  in  large  quantities,  and  the  tariff  tax 

cloths,  on  them  is  felt  with  its  full  weight ;  for,  since 
importation  continues,  it  is  clear,  that  not  only  the 
imported  goods,  but  also  those  of  the  same  kind  made 
at  home,  are  raised  in  price  to  the  full  extent  of  the  duty. 
The  duty  on  them,  like  that  on  dress  goods,  is  one  of 
the  comparatively  few  in  the  woollens  schedule  which 
has  not  been  entirely  prohibitory.  The  production  of 
these  finer  woollens  is  carried  on  in  this  country  only 
to  a  limited  extent.  It  is  not  surprising,  therefore, 
to  find  here  also  a  rise  of  the  rates  in  the  new  act. 
Cloths  are  there  divided  into  two  classes :  those  costing 
more  and  those  costing  less  than  eighty  cents  per 
pound.  The  latter,  costing  less  than  eighty  cents,  are 
admitted,  as  before,  at  an  ad-valorem  duty  of  thirty-five 
per  cent.  But  the  former,  costing  more  than  eighty  cents, 
per  pound,  are  now  made  to  pay  forty  per  cent.  The 
specific  compensating  duty  is  indeed  reduced  somewhat 
in  both  cases,  in  connection  with  the  lower  duties  on  wool, 
which  will  presently  be  discussed  ;  but  the  ad-valor  a: 
rate,  that  which  is  avowedly  protective,  is  increased. 

A  change  of  almost  the  same  kind  was  made  in  th 

Cotton      duties  on  cotton  goods.     Here  also  the  dut; 

goods,      was  lowered  on  the  common  grades  of  good 
and  on  these  grades,  as  will  be  seen  in  the  following,  th 
reduction  was  again  a  purely  nominal  one,  of  no  benefit 


THE  TARIFF  ACT  OF   1 883.  237 

to  the  consumers  and  taxpayers.  But  on  other  grades 
of  cotton  goods,  whose  importation  still  goes  on,  and 
on  which  a  decrease  in  the  duty  would  have  caused 
some  lowering  of  prices  and  some  relief  from  taxation, 
there  was  no  reduction,  but  an  increase.  The  duty  on 
cotton  hosiery,  embroideries,  trimming,  laces,  insertings; 
etc.,  had  been  thirty-five  per  cent,  under  the  old  law. 
In  the  act  of  1883  it  was  made  to  be  forty  per  cent. 
The  duty  of  thirty-five  per  cent,  had  been  imposed  during 
the  war,  in  1864,  at  a  time  when  raw  cotton  was  taxed, 
and  the  manufactured  cotton  also  paid  a  heavy  internal 
tax.  This  rate  remained  unchanged  from  1864  till  1883, 
notwithstanding  the  abolition  of  the  internal  taxes; 
and  now  it  has  even  been  raised  to  forty  per  cent. 
The  importance  of  this  change  is  clear  only  when  we 
know  that  imports  of  cottons  consist  chiefly  of  goods 
of  the  class  on  which  the  duty  is  increased.  The  statistics 
of  former  years  are  so  arranged  that  we  cannot  tell  ex- 
actly how  large  a  proportion  these  goods  bear  to  the  total 
imports  of  cottons  ;  but  it  is  safe  to  say  that  more  than 
half  the  cotton  goods  which  continue  to  be  brought  into 
this  country  from  abroad  will  be  affected  by  the  increase  of 
duty  from  thirty-five  to  forty  per  cent.1 

The  process  by  which  the  protective  system  has  gradu- 

1  The  goods  on  which  the  new  duty  took  effect  are  separately  stated  for 
the  first  time  in  the  statistical  returns  for  1883-84.  From  the  statement  of 
imports  for  the  ten  months  ending  April,  1884  (the  only  statement  the 
writer  has  at  hand),  it  appears  that  out  of  a  total  importation  of  about 
$25,000,000  of  cottons,  not  less  than  $15,000,000  paid  the  new  duty  of  forty 
per  cent. 


238  HISTORY  OF  THE  EXISTING  TARIFF. 

ally  been  brought  to  include  almost  every  article,  what- 
ever  its   character,   whose   production    in   the 
Iron  ore. 

country  is  possible,  is  illustrated  by  the  new 

duty  on  iron  ore.  This,  as  the  crudest  of  raw  mate- 
rials, would  be  admitted  free,  or  at  very  low  rates, 
according  to  ordinary  canons  of  protection.  In  1861  it 
had  paid  a  duty  of  ten  per  cent,  as  an  unenumerated 
article ;  and  this  rate  had  not  been  changed  during 
the  war,  since  the  article  was  not  one  likely  to  be  im- 
ported or  to  yield  revenue.  In  1870,  when  the  protec- 
tive principle,  as  we  have  seen,  was  applied  with  greater 
strictness  in  various  directions,  the  duty  was  raised  to 
twenty  per  cent.  In  recent  years  iron  ore  has  been  im- 
ported in  considerable  quantities  from  Spain  ;  and  now  the 
duty  has  been  raised,  in  the  present  tariff,  to  seventy-five 
cents  per  ton,  or  about  thirty-five  per  cent,  on  the  value. 

Still  another  instance  of  the  advance  of  duties  in  the 
existing  act  is  to  be  found  in  the  rates  on  certain  manu- 
factures of  steel.  Here,  as  has  so  often  happened, 

Steel. 

the  increase  is  concealed  under  what  is  in  ap- 
pearance merely  a  change  in  classification.  The  duties  on 
steel  ingots,  bars,  sheets,  and  coils  had  been,  until  1883, 
those  fixed  in  the  war  tariff  of  1864, — from  two  and  one 
quarter  cents  to  three  and  one  half  cents  per  pound,  varying 
with  the  value  of  the  steel.  The  act  of  1883  apparently 
reduced  these  duties  slightly,  making  them  from  two  to 
three  and  a  quarter  cents  per  pound.  But  previous  to  1883 
"  steel,  in  forms  not  otherwise  specified,"  had  been  admitted 


THE  TARIFF  ACT  OF   1 883.  239 

at  a  duty  of  thirty  per  cent.  Under  this  provision,  which 
had  been  in  force  since  1864,  a  number  of  articles,  like 
cogged  ingots,  rods,  piston-rods,  steamer  shafts,  and  so  on, 
had  paid  only  thirty  per  cent.  The  act  of  1883,  however, 
specifically  enumerated  these  and  other  articles,  and  put 
them  in  the  same  schedule  with  steel  ingots  and  bars, — 
that  is,  compelled  them  to  pay  a  duty  of  from  two  to  three 
and  a  quarter  cents  a  pound.  In  almost  all  cases  these  arti- 
cles now  must  pay  three  and  a  quarter  cents  a  pound, 
which  will  be  a  considerable  advance  over  the  previous  rate 
of  thirty  per  cent.  On  the  newly-enumerated  articles  the 
present  act  causes  an  increase  in  the  duty ;  although,  at 
first  sight,  the  new  schedule  of  steel  ingots,  bars,  etc., 
seems  to  show  a  lowering  of  the  rate. 

In  very  much  the  same  way,  by  means  of  a  change  in 
classification,  an  increase  has  been  brought  about  in  the 
duty  on  files.    These  had  paid,  before  1883,  a  duty  varying, 

according  to  the  length  of  the  files,  from  six  to 

Files, 
ten  cents  per  pound,  and,  in  addition,  thirty  per 

cent.     The  Tariff  Commission  recommended,  and  the  act 

of  1883  established,  a  new  rate  of  from  thirty-five  cents  to 

$2.50 per  dozen.     The  effect  of  the  change  was  to  increase 

the  duty  on  the  small  sizes  of  files.    These  sizes  alone  will 

feel  any  effect  from  the  new  duty.      Under  the  old  duty 

the  importation  of  most  classes  of  files  had  entirely  ceased; 

but  small  files,  such  as  are  used  chiefly  by  watchmakers, 

continued  to  be  imported  from  Switzerland  and  England. 

On  these  the  new  classification  brought  about  an  increase 


240  HISTORY  OF  THE  EXISTING  TARIFF. 

in  the  duty,  which,  it  is  needless  to  say,  operated  greatly 
to  the  advantage  of  the  domestic  manufacturers  of  the 
article. 

Again,  quicksilver  had  been  admitted  in  previous  years 
Other  ^ee  of  duty;  the  act  of  1883,  in  response  to 
articles.  a  demand  from  the  owners  of  the  richest 
mines  in  the  world,  those  of  California,  imposed  on 
this  metal  a  duty  of  ten  per  cent.1  One  of  the  impor- 
tant drag-net  paragraphs  in  the  tariff — "  manufactures, 
articles,  vessels,  and  wares,  not  otherwise  provided  for, 
of  brass,  iron,  lead,  pewter,  and  tins  " — shows  an  increase 
in  the  duty  from  thirty-five  to  forty-five  per  cent.  A 
very  large  number  of  articles,  tools,  and  machinery  of 
various  kinds  are  charged  with  duty  under  this  clause: 
the  imports  of  manufacturers  of  iron  alone,  on  which 
the  higher  rate  of  forty-five  per  cent,  will  take  effect, 
amounted  in  1883  to  nearly  $3,400,000.  Other  instances 
of  the  same  kind  could  be  found  in  the  new  act ;  but 
enough  have  been  given  to  show  that  the  process  of 
extending  and  increasing  the  protective  duties,  which  was 
traced  in  part  in  the  preceding  chapter,  by  no  means 
ceased  in  the  act  of  1883. 

The  reader  may  be  weary  of  the  dry  figures  of  the 
preceding  paragraphs,  and  especially  of  those  relating  to 
articles  of  little  importance,  like  watchmakers'  files.  It  is 
true  that  the  economic  welfare  of  the  country  is  not  per- 
ceptibly affected  by  an  increase  in  the  duty  on  watch- 

1  See  "  Tariff  Commission  Report,"  pp.  2591-2597. 


THE  TARIFF  ACT  OF   1 883.  24 1 

makers'  files  and  by  the  consequent  rise  in  their  price. 
But  the  tariff  contains  a  mass  of  these  duties, 

;  This  increase 

which,  taken  together,  have  no  small  influence     0f  duties 
on  the  prosperity  of  the  country ;  and  it  is  im-  not   defensi- 

ble 
possible  to  understand  the  history  of  the  tariff 

or  its  effects  without  going  more  or  less  into  details 
of  this  kind.  Moreover,  in  regard  to  this  act  of  1883, 
the  many  instances  in  which  duties  have  been  ad- 
vanced deserve  especial  attention,  because  they  throw 
light  on  the  character  of  the  act  and  the  intentions  of 
those  who  passed  it.  That  these  changes  are  not  defen- 
sible on  any  sound  economic  principles  need  not  here  be 
shown.  They  are  to  be  condemned  when  we  look  at 
them  from  the  point  of  view  not  only  of  economic  princi- 
ple, but  of  public  policy  and  public  faith.  The  Tariff 
Commission  was  given  the  task  of  revising  the  tariff 
"  judiciously  "  ;  its  recommendations  were  declared  to 
contain  a  general  reduction  of  duties  by  twenty  per  cent, 
or  more,  and  the  declared  object  of  the  leaders  of  the 
dominant  party  was  to  bring  about  some  substantial 
relief.  No  one  can  doubt  that  "  reform  "  at  the  present 
time  means  a  reduction,  and  excludes  an  increase  in 
duties,  and  that  the  advance  in  the  rates  on  cottons, 
woollens,  and  other  articles  was  no  part  of  what  the 
public  reasonably  expected  in  the  new  act.  Whatever 
may  be  the  feeling  as  to  the  retention  of  the  existing 
duties,  or  as  to  the  time  and  manner  in  which  reduction 
should  be  made,  public  opinion  with  the  majority  of  the 


242  HISTORY  OF  THE  EXISTING  TARIFF. 

people  may  be  safely  said  to  be  opposed  to  any  further 
growth  of  the  protective  system.  No  rational  and  un- 
prejudiced person  will  deny  that  protection  has  at  least 
been  carried  far  enough  in  our  tariff  system.  Had  the 
higher  duties  of  the  act  of  1883  been  brought  before  Con- 
gress in  a  separate  bill,  there  can  be  no  doubt  that  their 
enactment  would  have  been  impossible.  That  they  were 
in  many  cases  half  concealed  by  means  of  changes  in  clas- 
sification, or  were  coupled  with  apparent  reductions  on 
other  articles  in  the  same  schedules,  shows  that  the  pro- 
tectionists themselves  had  some  fear  of  putting  them 
nakedly  before  the  public.  The  existence  of  changes  of 
this  kind  causes  a  feeling  of  suspicion  as  to  the  new  tariff 
act  as  a  whole.  It  makes  a  doubt  arise  whether  in  those 
cases  where  the  figures  have  been  lowered,  any  thing  hag 
really  been  done  that  gives  relief  from  the  burden  of  the 
protective  duties. 

The   schedules    in  the  tariff  which  have  the  greatest 
effect  on  the  welfare  of  the  country  are  those 

Reductions 

of  duty:  fixing  the  duties  on  iron  and  wool;  and  to 
wool.  these  we  will  first  give  our  attention.  The 
change  in  the  duty  on  wool  was  sufficiently  simple. 
The  ad-valorem  rate  was  taken  off.  The  duty  of 
1867,  it  will  be  remembered,  had  been,  on  wools  costing 
less  than  thirty-two  cents,  ten  cents  per  pound  and  eleven 
per  cent,  ad  valorem,  and,  on  wools  costing  more  than 
thirty-two  cents,  twelve  cents  per  pound  plus  ten  per 
cent,  ad  valorem.      These  ad-valorem  rates  of  eleven  and 


THE  TARIFF  ACT  OF  1 883.  243 

ten  per  cent,  were  taken  off,  and  the  rates  left  simply  at 
ten  and  twelve  cents  per  pound.1  In  regard  to  the  greater 
part  of  the  wools  raised  in  the  United  States,  this  reduc- 
tion is  purely  nominal.  It  leaves  the  duty  on  the  cheaper 
grades  of  wool  raised  in  Texas  and  in  the  Territories  at  a 
point  where  it  is  still  entirely  prohibitory.  That  such  is 
the  case,  has  been  frankly  acknowledged  in  the  official 
mouth-piece  of  the  wool  manufacturers.2  So  far  as  con- 
cerns the  higher  grades  of  wool,  such  as  are  raised  in  Ohio 
and  neighboring  States,  the  reduction  is  a  slight  sub- 
stantial gain.  The  only  objection  is  that  it  does  not  go 
far  enough.  The  duty  on  wool,  notwithstanding  the 
cumbrous  machinery  of  compensating  duties,  undoubtedly 
has  a  hampering  influence  on  the  wool  manufacture,  and 
has  been  an  important  factor  in  confining  this  industry 
within  a  limited  range  that  is  often  complained  of.     Like 

1  The  duty  in  the  act  of  1883  is  ten  cents  on  wool  costing  thirty  cents  or 
less,  and  twelve  cents  on  that  costing  more  than  thirty  cents.  The  change 
(in  the  line  of  division,  according  to  value)  from  thirty-two  to  thirty  cents 
is  not  without  importance  ;  and,  as  far  as  it  goes,  it  evidently  tends  to 
neutralize  the  reduction.  This  is  confessed  in  the  Bulletin  Wool  Mf.t 
xiii.,  11,  109. 

The  duty  on  carpet  wool  (ante  p.  47)  was  also  reduced  from  three  and  six 
cents  per  pound  to  two  and  one  half  and  five  cents.  There  is  no  reason 
why  carpet  wool  should  not  have  been  admitted  entirely  free  of  duty,  since 
such  wool  is  hardly  raised  in  this  country  at  all.  (See  "  Tariff  Comm.  Report," 
pp.  2335-2338.)  The  retention  of  the  duty  on  it  is  doubtless  explained  by 
the  fact  that  the  compensating  specific  duty  on  carpets,  like  most  of  the  com- 
pensating duties,  in  reality  yields  a  good  deal  of  protection  to  the  manu- 
facturers ;  this  they  are  unwilling  to  give  up  ;  and  they  cannot  retain  it 
without  also  retaining  the  duty  on  carpet  wool,  that  being  the  only  founda- 
tion for  the  specific  compensating  duty. 

aSee  Bulletin  Wool M/.,  xiii.,  100. 


244  HISTORY  OF  THE  EXISTING  TARIFF. 

every  protective  duty,  it  causes  consumers  to  pay  a  tax 
which  does  not  go  into  the  government  coffers,  but  merely 
aids  or  enriches  individuals.  As  a  tax  on  raw  materials, 
it  tends  to  bear  with  heavier  weight  than  would  be  the 
case  with  the  same  duty  on  a  finished  product  ;  since  it  is 
advanced  again  and  again  by  the  wool  dealer,  the  manu- 
facturer, the  cloth  dealers,  the  tailor,  each  of  whom  must 
have  a  greater  profit  in  proportion  to  the  greater  amount 
of  capital  which  the  wool  duty  and  the  higher  price  of 
wool  make  it  necessary  for  him  to  employ.  So  strong 
and  so  clear  are  the  objections  to  duties  of  this  kind  that 
hardly  another  civilized  country,  whatever  its  general 
policy,  attempts  to  protect  wool.1  Moreover,  the  reduc- 
tion of  a  duty  of  this  kind  can  take  place  with  excep- 
tional ease.  Wool  is  not  produced,  as  a  rule,  in  large 
quantities,  by  persons  who  devote  themselves  exclusively 
to  this  as  a  business.  It  is  mainly  produced  by  farmers, 
whose  chief  income  comes  from  other  sources,  and  on 
whom  a  reduction  of  duty  and  a  fall  of  price  would  fall 
with  comparatively  little  weight.8  The  case  is  different 
in  many  branches  of  manufacture,  where  a  considerable 

1  Not  only  England,  but  Germany,  France,  Austria,  and  Italy,  all  of 
whom  maintain  a  more  or  less  protective  tariff,  and  grow  large  quantities  of 
wool,  admit  this  material  free  of  duty. 

a  It  may  be  said  that  this  is  not  the  case  with  the  large  sheep  ranches  of 
the  Western  States  and  Territories.  But  these  ranches,  it  happens,  pro- 
duce the  grades  of  wool  of  which  the  price  is  least  affected  by  the  duty  ;  and 
moreover,  the  production  of  these  wools  has  been  exceptionally  profitable 
(partly  in  consequence  of  the  tariff),  and  such  fall  in  price  as  would  ensue 
could  very  well  be  endured  by  the  producers.  See  "  Tariff  Comm.  Report," 
pp.  1782-1785,  and  the  passages  in  Bulletin  Wool Mf.  already  referred  to. 


THE  TARIFF  ACT  OF   1 883.  245 

fall  in  prices  may  produce  an  entire  cessation  of  produc- 
tion and  a  great  disturbance  of  economic  relations,  and 
where  in  consequence  a  reduction  of  protection  must  be 
made  more  gradually  and  carefully.  The  wool  duty  may 
be  reduced  quickly  and  sharply  without  any  great  danger 
of  interfering  harmfully  with  the  established  state  of 
things.  All  economic  experience,  and  more  especially 
the  lessons  of  the  last  few  years,  show  that  such  a  change 
is  likely  to  come  in  the  near  future. 

We  turn  now  to  the  reductions  of  duty  in  the  new  act 
on  woollen  goods,  which  must  follow  from  the 

Woollens. 

lower  duty  on  wool.  It  has  been  seen  that 
the  ad-valorem,  or  protective,  duty  was  not  decreased 
at  all,  and  that  on  the  finer  classes  of  woollens  it  was 
increased  from  thirty-five  to  forty  per  cent.  But  the 
specific,  or  compensating,  duty  was  reduced  from  fifty 
cents  to  thirty-five  cents  a  pound.  The  present  duty  is 
thirty-five  cents  a  pound  and  thirty-five  per  cent,  on 
woollens  costing  less  than  eighty  cents  per  pound,  and 
thirty-five  cents  and  forty  per  cent,  on  woollens  costing 
more  than  eighty  cents.  The  lowering  of  the  specific 
duty  was  in  part  called  for  by  the  reduction  of  the  duty 
on  wool ;  but  the  decrease  is  somewhat  larger  than  the 
reduced  duty  on  the  raw  material  made  necessary.  The 
compensating  duty  in  the  new  act  seems  to  be  fixed  on 
the  assumption  that  no  more  than  three  and  one  half 
pounds  of  wool  are  used  in  making  a  pound  of  cloth ; 
whereas   the   act    of  1867,    it    will   be    remembered,  was 


246  HISTORY  OF  THE  EXISTING  TARIFF. 

framed  on  the  basis  of  four  pounds  of  wool  to  the  pound 
of  cloth.  This  may  be  called  a  tacit  confession  that  the 
compensating  duty  of  1867  was  excessive;  and  the  new 
arrangement  takes  away  some  of  the  protection  which 
was  formerly  given  by  the  specific  duty.  But  this  change 
is  of  little,  if  any,  benefit  to  consumers.  So  far  as  the 
finer  grades  of  woollens  are  concerned,  it  is  more  than 
offset  by  the  increase  in  the  ad-valorem  duty  from  thirty- 
five  to  forty  per  cent.  So  far  as  the  cheaper  grades  of 
woollens  are  concerned,  it  has  no  real  effect.  The  duty 
on  these  was  prohibitory  before,  and  it  remains  prohibi- 
tory now.  A  reduction  of  a  prohibitory  duty  may  be 
made  and  still  leave  the  rate  so  high  as  to  shut  out  impor- 
tation ;  and  this  is  what  has  been  done.  Such  a  change 
has  no  effect  on  trade  or  prices,  and  brings  no  benefit  to 
consumers.  Precisely  similar  is  the  state  of  things  in  re- 
gard to  flannels,  blankets,  and  similar  goods.  On  these 
also  the  specific  duty  has  been  reduced, — on  the  cheapest 
grades  from  a  rate  of  twenty  cents  a  pound  to  rates  of 
ten  and  twelve  cents.  But  the  new  rates  are  still  high 
enough  to  shut  out  importation,  and  bring  about  no 
change  beyond  that  of  the  figures  on  the  statute-book.1 

1  The  manufacturers  assert  that  the  duties  on  goods  have  been  reduced 
more  in  proportion  than  those  on  wool.  See  Mr.  Hayes's  article  in  Bulletin 
Wool  Mf. ,  vol.  xiii.  Complaints  are  particularly  strong  from  the  manufac- 
turers of  yarns,  who  say  that  the  readjustment  of  duties  on  the  new  tariff 
enables  yarns  to  be  imported  from  England  too  easily  ;  and  it  seems  there  is 
ground  for  this  complaint,  to  the  extent  that  on  some  yarns  the  duty,  in  com- 
parison with  the  duty  on  the  wool,  is  too  low. — See  Bureau  of  Statistics 
Report  for  quarter  ending  June,  1884,  pp.  564-566. 


THE  TARIFF  ACT  OF  1 883.  247 

Changes  of  precisely  this  kind  are  to  be  found  in 
other  parts  of  the  new  act.  The  rates  on  the  cheap 
grades  of  cotton  goods,  for  instance,  show  a 

0  Cottons. 

considerable  reduction.  On  the  lowest  class 
of  unprinted  goods  the  duty  had  been  five  cents  per 
yard ;  it  is  two  and  one  half  cents  by  the  new  act. 
But  the  old  duty  has  for  many  years  ceased  to  have 
any  appreciable  effect  on  the  prices  of  cotton  goods. 
The  common  grades  of  cottons  can  be  made,  as  a  rule,  as 
cheaply  in  this  country  as  anywhere  in  the  world ;  in 
fact,  some  of  them  are  regularly  exported  in  large  quanti- 
ties.1 If  the  duty  on  such  cottons  were  entirely  abol- 
ished, it  is  probable  that  they  could  not  be  imported ; 
and  it  is  certain  that  a  very  small  duty  would  suffice  to 
shut  out  from  our  market  all  foreign  competitors  in  them. 
Under  these  circumstances  the  lowering  of  the  rate  of 
duty  which  the  new  act  makes,  is  of  no  effect  whatever. 
The  same  holds  good  of  almost  all  the  various  reductions 
in  the  specific  duties  on  plain  and  printed  cotton  goods. 
These  changes  are  in  no  sense  a  reduction  of  taxation. 
On  the  other  hand,  in  the  case  of  the  finer  cotton  goods, 
laces,  trimmings,  etc.,  on  which  a  lowering  of  the  rates 
would  have  brought  about  a  real  relief  from  taxation, 
there  was,  as  we  have  seen,  no  decrease,  but  an  increase 
in  the  new  act. 

The  duty  on  pig-iron  was  reduced  by  the  new  act  from 

1  See  the  remarks  of  the  report  on  the  Cotton  Manufacture,  in  the  volume 
of  the  Census  of  1880  on  Manufactures. 


248  HISTORY  OF  THE  EXISTING  TARIFF. 

$7.00  to  $6.72  a  ton.  This  change  is  insignificant,  hardly 
two  per  cent,  on  the  foreign  price  of  iron.  A 
greater  could  have  been  made  without  danger  of 
any  disturbance  of  the  iron  trade.  So  far  as  it  goes,  it  is  in 
the  right  direction.  The  same  general  remark  is  to  be  made 
of  the  reduction  on  bar-iron,  which,  on  the  ordinary  grade, 
lowers  the  duty  from  one  cent  a  pound  to  eight  tenths 
of  a  cent.  The  reduction  on  bar-iron  is,  indeed,  a  change  of 
the  same  kind  as  the  reduction  on  cottons,  on  woollens, 
and  on  many  other  articles, — it  still  leaves  the  duty  still 
high  enough  to  prevent  any  lowering  of  prices  and  any 
effect  on  trade.1  The  duties  on  the  various  forms  of 
manufactured  iron — hoop,  band,  sheet,  plate  iron,  etc. — 
have  gone  down  in  much  the  same  way.  The  reductions 
were  slight  in  all  cases,  and  often  merely  nominal.  It  is 
safe  to  say  that,  in  general,  the  new  rates  on  iron  and  its 
manufactures  can  have  no  appreciable  effect  on  the  trade 
and  welfare  of  the  country. 

The  duty  on  steel  rails  shows  a  considerable 

reduction.     The  old  rate  was  $28.00  a  ton,  and 

the  rate  now  in  force  is  $17.00.     If  this  change  had  been 

made  four  or  five  years  ago,  it  would  have  been  of  much 

1  A  manufacturer  of  iron,  operating  near  the  sea-shore,  admitted  that  in 
October,  1882, — not  a  time  of  special  depression, — the  price  of  domestic 
bar-iron  was  lower  by  $5.00  than  the  price  for  which  foreign  iron  could  be 
imported  ;  and  that  the  price  in  Pittsburg  was  lower  by  $10.00  than  iron  could 
be  imported  for.  '  The  change  in  duty  under  the  act  was  one  fifth  of  a  cent 
per  pound,  or  $4.48  per  gross  ton  ;  that  is,  less  than  the  reduction  of  $5.00, 
which  it  was  admitted  that  the  manufacturers  on  the  sea-shore  (not  to  men- 
tion those  of  Pittsburg)  could  "stand."  "Tariff  Comm.  Report,"  pp. 
2458,  2459. 


THE  TARIFF  ACT  OF  1 883.  249 

practical  importance  ;  but  for  the  immediate  present 
and  possibly  in  the  future,  it  has  no  effect  whatever.  It 
has  already  been  said  that,  after  the  enormous  profits 
made  by  the  steel-rail  makers  in  1 879-1 881,  the  produc- 
tion in  this  country  was  greatly  increased.  At  the 
same  time  the  demand  from  the  railroads  fell  off;  and 
the  huge  quantities  which  the  mills  were  able  to  turn 
out  could  be  disposed  of,  if  at  all,  only  at  prices  greatly 
reduced.  The  consequence  is  that  the  price  of  rails, 
which  in  1880  was  higher  than  the  English  price  by  the 
.full  extent  of  the  duty  of  $28.00,  is  now  comparatively 
little  above  it.1  The  price  here  is  still  above  the  English 
rate;  but  the  difference  is  less  than  $17.00  a  ton;  and 
the  duty  of  that  amount  is  still  sufficient  to  keep  out 
foreign  rails.  The  reduction  of  the  duty  has  therefore 
had  no  effect  on  prices,  and  has  brought  no  immediate 
benefit  to  consumers  ;  and  for  the  present,  like  the  changes 
already  noticed  in  regard  to  cottons  and  woollens,  it  is 
merely  a  lowering  of  the  figures  on  the  statute-book. 
Possibly  in  the  future,  when  railroad  building  is  again 
pushed,  and  the  demand  for  rails  quickens,  it  may  have 
some  effect.  It  will  then  prevent  the  rail-makers  from 
pushing  their  prices  quite  up  to  the  extravagant  figures 
of  past  years.  The  probability  is,  to  be  sure,  that  this 
could  not  be  done  even  if  the  old  duty  had  been  retained, 
since  the  knowledge  of  the  process  and  the  facilities  for 
production  have  been  so  greatly  extended  within  the   last 

1  See  appendix,  VI. 


250  HISTORY  OF  THE  EXISTING  TARIFF. 

two  or  three  years.  But  the  change  in  the  duty  at  least 
reduces  one  factor  of  those  that  made  the  great  steel-rail 
"  boom  "  of  1880  a  possibility. 

Analogous  in  its  effects  to  the  reduction  on  steel  rails, 
is  that  on  copper.  The  duty  on  this  article  goes 
down  from  five  cents,  the  rate  imposed  in  1869, 
to  four  cents  a  pound.  It  has  been  shown  in  the  preced- 
ing pages  that  the  duty  on  copper  enured  almost  exclu- 
sively to  the  benefit  of  the  owners  of  the  copper  mines  of 
Lake  Superior,  who  were  enabled  by  it  to  combine  and  fix 
the  price  of  copper  without  fear  of  competition  from  abroad. 
The  great  profits  of  their  mines  caused  them  steadily  to  in- 
crease their  product ;  and  although  much  of  their  surplus 
has  been  disposed  of  abroad,  at  prices  lower  than  those 
demanded  at  home,  the  growing  supply  caused  the 
domestic  price  slowly  to  fall.  The  discovery  of  large 
deposits  of  copper,  in  recent  years,  in  Montana  and  Ari- 
zona, and  the  shipment  to  market  of  a  great  deal  of  copper 
from  these  sources,  have  at  the  same  time  broken  the 
monopoly  of  the  Lake  Superior  combination,  and  caused 
the  price  to  go  down  still  further.  Importation  of  copper 
in  any  considerable  quantities  ceased  many  years  ago ;  and 
in  face  of  the  recent  fall  in  the  domestic  price,  imports 
would  not  be  resumed  even  if  a  somewhat  greater  reduc- 
tion of  duty  were  made  than  is  contained  in  the  new  tariff. 
In  the  last  two  or  three  years,  the  domestic  competition  has 
been  so  strong  that  the  price  in  this  country  has  been, 
quality  for  quality,  hardly  three   cents  above  the  price 


THE  TARIFF  ACT  OF  1 883.  25 1 

abroad.'  Under  such  conditions  a  reduction  of  the  duty 
from  five  to  four  cents  a  pound  evidently  has  no  immedi- 
ate effect.  It  is  true  that  the  duty  of  four  cents  a  pound 
still  makes  it  possible  that  in  the  future  a  combination  of 
the  copper  producers  may  again  raise  their  prices  at  the 
expense  of  consumers.  Such  a  result,  it  is  said,  is  far 
from  impossible,  since  the  product  of  the  Western  mines 
is  unsteady,  and  not  unlikely  to  cease  altogether ;  which 
would  leave  the  field  free  once  more  to  the  Lake  Superior 
producers.  A  complete  abolition  of  the  duty  on  copper 
could  be  made  now  without  causing  any  appreciable 
disturbance  of  trade,  and  it  would  prevent  for  the  future 
a  repetition  of  the  abuses  of  the  past. 

The  duty  on  marble  in  the  new  act  is  fixed  at  sixty-five 
cents  per  cubic  foot  on  rough  marble,  and  at  other  reduc- 
$1.10  per  cubic  foot  on  marble  sawed,  dress-  tions- 
ed,  and  in  slabs.  This  is  hardly  a  perceptible  decrease 
from  the  compound  duties  which  were  discussed  in 
the  preceding  chapter.2  The  duty  on  nickel  was  put 
at  fifteen  cents  a  pound,  in  place  of  the  previous  duty 
of  twenty  and  thirty  cents  a  pound.  Practically  all 
the  nickel  imported  in  recent  years  has  come  in  at  a 
duty  of  twenty  cents ;  consequently  the  reduction  is  less 
than  it  seems  to  be  on  the  surface.3  It  is  worth  while 
to  note  that  in  both  these  cases  the  Tariff  Commission 

1  See  appendix  V.,  for  complete  tables  of  the  prices,  imports,  and  exports 
of  copper. 

a  See  ante,  p.  70. 

1  See  "  Tariff  Comm.  Report,"  pp.  201,  202. 


252  HISTORY  OF  THE  EXISTING  TARIFF. 

had  recommended  rates  that  would  practically  have 
increased  the  duty.  In  both,  a  sharper  reduction  would 
have  caused  no  disturbance  of  trade  or  of  production. 
Not  a  few  changes  were  made  which  can  be  commended, 
in  the  same  way,  without  any  qualification  except  that 
they  were  exceedingly  moderate.  A  fair  example  of 
these  is  the  reduction  of  the  duty  on  manufactures  of  silk 
from  sixty  to  fifty  per  cent.  In  practice  the  old  duty  had 
been  equivalent  to  not  more  than  fifty  per  cent,  on  the 
actual  value  of  the  goods,  because  of  the  regular  and 
steady  undervaluation  of  silk  imports.  Such  undervalua- 
tions, and  the  concomitant  practice  of  false  invoicing,  are 
the  inevitable  result  of  high  ad-valorem  duties ;  and  they 
will  probably  continue  to  exist  under  the  new  duty  of  fifty 
per  cent.,  and  will  make  that  again  equivalent  in  fact  to 
forty  or  forty-five  per  cent.  The  silk  manufacturers  of 
this  country  attempted  to  contrive  a  schedule  of  specific 
duties  on  silks;  but  their  scheme  was  not  satisfactory,  as 
indeed  might  have  been  expected  from  the  greatly  varying 
character  of  the  goods.  The  ad-valorem  method  was 
retained,  with  the  reduced  rate.  The  reduction  is  as  great 
as  could  have  been  expected  under  the  circumstances,  and 
possibly  as  great  as  was  wise  at  so  short  notice.  The 
duty  must  be  still  considered  much  too  high,  whether  we 
look  at  it  from  the  economic,  or  from  the  fiscal  and  ad- 
ministrative point  of  view.1  The  change  in  the  duty  on 
silks  is  perhaps  the  greatest  effective  reduction  in  the  new 

1  On  the  silk  duties,  see  "Tariff  Comra.  Report,"  pp.  2165-2174. 


THE  TARIFF  ACT  OF   1 883.  253 

tariff  act.  Others  of  the  same  kind  are  the  lowering  of 
the  rate  on  finer  linens,  from  forty  to  thirty-five  per  cent. ; 
the  decrease  of  the  specific  duty  on  cotton  bagging ;  and 
so  on  with  a  considerable  number  of  articles. 

It  is  interesting  to  note  that  the  duties  on  a  number 
of  agricultural  or  mainly  agricultural  pro-  wheat, 
ducts,  such  as  beef  and  pork,  hams  and  corn» etc- 
bacon,  lard,  cheese,  butter,  wheat,  corn,  and  oats,  are 
left  unchanged  in  the  act  of  1883.  The  duty  on  bar- 
ley was  somewhat  lowered,  at  the  request  of  the 
brewers  of  beer ;  and  that  on  rice  also  was  slightly  re- 
duced. But  almost  all  of  these  products  continue  to  be 
charged  with  the  same  rates  as  in  previous  years.  It  is 
needless  to  say  that  the  duties  on  them  have  no  effect 
whatever,  except  to  an  insignificant  extent  on  the  local 
trade  across  the  Canadian  border.  Articles  such  as  these, 
which  are  steadily  exported,  are  not  affected  by  import 
duties.  The  duties  probably  are  left  unchanged  in  order 
to  maintain  the  fiction  that  the  agricultural  population 
gets  through  them  a  share  of  the  benefits  of  protection. 
It  is  curious  that  the  reductions  in  this  schedule,  on  barley 
and  on  rice,  affect  almost  the  only  products  on  which  the 
duties  in  fact  bring  any  benefit  to  the  agricultural  pro- 
ducer and  any  burden  for  the  consumer. 

Enough   has   been    said    of   the    details    of     General 
the   changes  made   by   the   act   of    1883.     Its     remarks- 
general  character  cannot  easily  be  described.     In  truth, 
it    can   hardly  be   said    to   have   any   general   character. 


254  HISTORY  OF  THE  EXISTING  TARIFF. 

It  is  best  described  as  a  half-hearted  and  unsuccess- 
ful attempt  on  the  part  of  protectionists  to  bring 
about  an  apparent  reform  of  the  tariff.1  That  it  was 
framed  by  men  who  at  heart  were  protectionists,  and 
who  had  no  conviction  that  protection  in  this  coun- 
try had  been  carried  too  far,  or  even  far  enough,  is 
shown  by  the  numerous  cases  in  which,  more  or  less 
openly,  an  increase  in  protective  taxes  was  made.  On 
the  other  hand,  the  desire  to  make  some  concession  to 
the  growing  popular  feeling  against  excessive  duties 
caused  reductions  to  be  made — sometimes  reductions  that 
gave  a  real,  though  slight,  relief  from  the  burden  of  the 
duties,  but  more  often  reductions  such  as  had  little  effect 
other  than  the  change  of  the  figures  on  the  statute-book. 
On  the  whole,  the  changes  have  clearly  not  been  of 
enough  importance  to  affect  the  essential  character  of  our 
tariff  system.  That  system  still  retains,  substantially  un- 
changed, those  high  duties  which  were  imposed  during 
the  war,  and  those  further  protective  duties  which  the 
weakness  of  Congress,  the  general  disorder  of  public 
affairs,  and  the  insistence  of  domestic  producers,  brought 
about  in  the  years  immediately  following  the  war.     It  is 

1  Mr.  John  L.  Hayes,  the  President  of  the  Tariff  Commission,  writing 
more  particularly  of  the  new  duties  on  wool  and  woollens,  said,  shortly  after 
the  passage  of  the  act :  "  Reduction  in  itself  was  by  no  means  desirable  to 
us  ;  it  was  a  concession  to  public  sentiment,  a  bending  of  the  top  and 
branches  to  the  wind  of  public  opinion  to  save  the  trunk  of  the  protective 
system.  In  a  word,  the  object  was  protection  through  reduction.  We  were 
willing  to  concede  only  to  save  the  essentials  both  of  the  wool  and  woollens 
tariff.  *  *  *  We  wanted  the  tariff  to  be  made  by  our  friends."—  Bul- 
letin Wool  M/.,  xiii.,  94. 


THE  TARIFF  ACT   OF   1 883.  255 

still  a  system  which,  if  proposed  in  time  of  peace  as  a 
substitute  for  the  duties  in  force  in  i860,  would  be  re- 
jected as  excessive  and  unreasonable. 

Since  the  passage  of  the  act  of  1883,  several  unsuccess- 
ful attempts  have  been  made  to  amend  it.1  In  1884,  Mr. 
Morrison,  of  Illinois,  introduced  a  bill  by  which  a  general 
reduction  of  twenty  per  cent.,  and  the  entire  remission  of 
duties  on  iron  ore,  coal,  lumber,  and  other  articles,  were 
proposed.  Mr.  Morrison  may  have  been  moved  to  advo- 
cate the  plan  of  a  "  horizontal  "  reduction  by  the  example 
which  the  Republicans  had  set  in  1872  ;  and  doubtless  he 
was  also  influenced  by  the  circumstance  that  the  pro- 
tectionists themselves  had  arranged  the  details  of  the  act 
of  1883,  and  could  not  complain  of  disproportionate  re- 
ductions, or  of  a  disturbance  of  relative  rates,  under  a 
plan  which  affected  all  articles  equally.  Nevertheless,  the 
proposal  met  with  vehement  opposition  not  only  from 
the  Republicans,  but  from  a  strong  minority  in  Mr.  Mor- 
rison's own  party.  It  was  disposed  of  on  May  6,  1884,  by 
a  vote  (156  to  151)  striking  out  its  enacting  clause. 
Two  years  later,  in  the  Forty-ninth  Congress,  a  similar 
disposition  was  made  of  another  bill  introduced  by  Mor- 
rison. The  proposal  of  1886,  however,  was  different  from 
that  of  1884,  in  that  it  made  detailed  changes  in  the 
duties.  Lumber,  salt,  wool,  hemp,  flax,  and  other  articles 
were  put  on  the  free  list ;  the  duty  on  woollens  was  made 

1  An  excellent  account  of  these  attempts  is  given  by  Mr.  O.  H.  Perry  in 
the  Quarterly  Journal  of  Economics  for  October,  1887,  vol.  II. ,  pp.  69-79, 


256  HISTORY  OF  THE   EXISTING  TARIFF. 

35  per  cent.,  the  specific  duties  on  woollens  being  re- 
moved with  the  duties  on  wool ;  and  reductions  were  pro- 
posed on  cottons  and  on  sugar.  The  bill  never  was  dis- 
cussed in  Congress,  for  Mr.  Morrison's  motion  to  proceed 
to  its  consideration  was  defeated  by  a  vote  of  157  to  140, 
and  during  the  rest  of  the  session  no  further  attempt  was 
made  to  take  it  up.  Early  in  the  next  session,  in  Decem- 
ber, 1886,  a  motion  was  again  made  to  proceed  to  the 
consideration  of  revenue  bills,  and  again  was  defeated. 
Some  other  measures  of  less  significance  were  also  intro- 
duced in  these  years,  such  as  a  bill  of  1884,  to  restore  the 
duties  of  1867  on  wool,  which  was  defeated  by  a  close 
vote  of  126  to  119,  and  bills  introduced  by  Messrs.  Ran- 
dall and  Hiscock  in  1886.  Mr.  Randall's  bill  proposed 
the  removal  of  internal  taxes  on  tobacco,  fruit  brandies, 
and  spirits  used  in  the  arts,  entire  remission  of  duties  on 
lumber,  jute  butts,  and  a  few  minor  articles,  and  a  slight 
reduction  of  some  other  duties.  Mr.  Hiscock's  bill  pro- 
posed similar  changes  in  the  internal  taxes,  and  a  large 
reduction  of  the  duty  on  sugar,  with  a  bounty  to  Ameri- 
can sugar-makers.  Both  of  these  bills,  which  indicate  the 
manner  in  which  the  protectionists  tried  to  grapple  with 
the  problem  of  reducing  the  revenue,  were  referred  to  the 
Committee  of  Ways  and  Means,  and,  not  being  reported 
from  that  body,  never  came  to  a  vote  in  the  House. 

It  may  be  an  indication  of  some  change  in  public 
opinion  that  the  minority  among  the  Democratic  Con- 
gressmen, by  whom  the  consideration  of  tariff  bills  has 


THE  TARIFF  ACT  OF  1 883.  257 

been  opposed,  has  become  less  strong  in  the  last  few 
years.  The  Democrats  have  had  the  control  of  the  House 
since  1884,  but  have  been  divided  on  the  tariff  question. 
In  1884,  41  Democrats  voted  against  Mr.  Morrison's 
horizontal  bill,  while  151  voted  for  it;  in  June,  1886,  35 
Democrats  voted  against  the  tariff  bill  of  that  year,  136 
voting  for  it;  and  in  December  of  1886,  the  votes  were 
26  in  the  negative  and  143  in  the  affirmative.  The  Dem- 
ocratic minority  has  steadily  diminished,  from  41  to  35,  and 
between  the  two  sessions  of  the  Forty-ninth  Congress 
from  35  to  26.  The  Republican  votes  on  all  three  occa- 
sions were  practically  unanimous  in  opposition  to  the 
proposed  legislation.1 

The  act  of  1883  made  no  change  that  could  be  satis- 
factory to  those  who  oppose  protective  duties  on  prin- 
ciple, or  to  that  larger  class  whose  members  believe  that 
the  time  has  come  for  some  modification  of  the  existing 
protective  system.  The  feeling  in  favor  of  that  system, 
while  perhaps  undiminished  in  those  parts  of  the  country 
where  the  population  is  engaged  very  largely  in  protected 
industries,  has  declined  perceptibly  in  the  country  at  large. 
The  redundant  revenue  has  acted  as  a  powerful  force 
toward  a  reduction  of  duties,  as  under  similar  circum- 
stances it  acted  in  1832-33,  and  again  in  1857.  The  indi- 
cations are  that  duties  will  be  lowered  in  some  moderate 
degree  in  the  early  future.     When  it  is  found,  as  beyond 

1  Interesting  tables,  by  States,  of  these  votes,  will  be  found  in  Mr.  Perry's 
article,  referred  to  above. 


258  HISTORY  OF  THE  EXISTING  TARIFF. 

doubt  it  will  be  found,  that  no  such  disastrous  results 
ensue  as  are  predicted  by  the  extreme  protectionists,  a 
further  reduction  may  meet  with  less  opposition.  Cer- 
tainly it  is  to  be  wished  that  changes  from  a  system  which 
has  been  in  force  for  twenty-five  years,  and  to  which  the 
industrial  organization  has  more  or  less  completely 
adapted  itself,  may  be  made  slowly  and  with  caution.  It 
would  be  a  great  mistake — fortunately  not  one  likely  to 
be  committed — if  a  headlong  reduction  like  that  of  1833 
were  again  to  be  attempted,  and  were  again  to  overshoot 
the  mark.  A  great  change  in  the  character  of  our  cus- 
toms system,  in  order  to  be  safe,  must  be  gradual  and 
tentative,  and  is  not  likely  to  be  fully  carried  out  in  less 
time  than  has  elapsed  since  the  present  system  was  begun. 
But  the  permanent  retention  of  the  extreme  protection 
which  is  the  unexpected  residuum  of  the  war  troubles, 
should  not  be  permitted ;  proposals,  such  as  are  occasion- 
ally brought  forward,  for  the  further  increase  of  protective 
duties,  are  to  be  uncompromisingly  opposed ;  and  a  care- 
ful and  judicious  pruning  of  the  present  duties  is  the 
part  of  sound  policy  for  the  immediate  future. 


APPENDIX. 

TABLE   I. 

Imports,  Duties,   and  Ratio  of  Imports  to  Duties,  1 860-1 883. 

{From  the  "  Statistical  Abstract.") 

00.000  omitted. 
Imports. 


Per  cent,  of 

Per  cent,  of 

FiscalYear 

Duties 

Duties  on 

Duties  on 

Ending 

Free. 

Dutiable. 

Total. 

Collected. 

Dutiable  Im- 

Aggregate 

June  30. 

ports. 

Imports. 

i860 

73-7 

279.9 

353-6 

52.7 

19.67 

15.67 

I 

71.1 

218.2 

289.3 

39-0 

18.84 

14.21 

2 

52.7 

136.6 

189.4 

46.5 

36.20 

26.08 

3 

35-2 

208.I 

243-3 

63.7 

32.62 

28.28 

4 

41. 1 

275-3 

316.4 

96.5 

36.69 

32.04 

5 

44-5 

194.2 

23S.7, 

80.6 

47.56 

38.46 

6 

59-° 

375-3 

434-8 

177.1 

48.35 

41  81 

7 

23.1 

372.6 

395-7 

168.5 

46.67 

44-56 

8 

15.2 

342.2 

357-4 

160.5 

48.70 

46.56 

9 

21.6 

395-9 

417-5 

176.6 

47-36 

44  76 

1870 

20.1 

415.8 

435-9 

191. 5 

47.16 

44.92 

1 

36.6 

483-6 

520.2 

202.4 

44.05 

40.47 

2 

47-3 

579-2 

626.5 

212.6 

41.47 

37-94 

3 

144.8 x 

497-3 

642.1 

184.9 

33.15 

27.89 

4 

I5I-5 

415-9 

567.4 

160.5 

33.61 

28.29 

5 

146.3 

386.7 

533-0 

154  6 

40.69 

29-37 

6 

140.4 

320.4 

460.8 

M5-2 

44.80 

31  25 

7 

140.8 

310.5 

451-3 

128.4 

42.95 

20.20 

8 

I4I-3 

295.8 

437-0 

127.2 

42.81 

29  01 

9 

142.7 

3°3-i 

445-7 

1334 

44-95 

30.37 

1880 

208.3 

459-6 

667.9 

182.7 

43- 56 

29.12 

1 

202.5 

440.2 

642.7 

193.8 

43-25 

29.79 

2 

210  6 

514. 1 

7246 

216. 1 

42.70 

30.18 

3 

207.5 

515-7 

723.2 

210.6 

42.65 

3005 

4 

211. 3 

456.3 

667.6 

1903 

41.70 

28.5 

5 

192.9 

386.7 

579-6 

178. 1 

46  00 

30.7 

6 

211. 5 

413.8 

625.3 

189.4 

45  80 

30.0 

7 

233- 1 

450.3 

683.4 

188.5 

47.10 

27.6 

1  The  abolition  of  the  tea  and  coffee  duties,  and  the  free  admission  of 
some  other  articles,  in  1872,  account  for  the  sudden  increase  of  non-dutiable 


imports.     See  p.  186. 


259 


260  APPENDIX. 

This  table  is- taken  from  the  "Statistical  Abstract," 
and  gives  the  computations  of  the  Bureau  of  Statistics. 
The  figures  given  in  successive  editions  of  the  "  Abstract  " 
are  not  always  the  same,  and,  again,  sometimes  vary  from 
those  given  by  the  Bureau  in  its  "  Reports  on  Commerce 
and  Navigation."  These  discrepancies  arise  in  part  from 
varying  usage.  "  Imports,"  for  instance,  sometimes  in- 
clude articles  of  domestic  produce  which  have  been  ex- 
ported and  brought  back,  and  "  duties "  sometimes 
include  the  internal  tax  then  collected  on  such  articles. 
Some  peculiarities  in  the  table  as  given  above  may  be 
worth  noting.  The  average  rate  on  dutiable  articles  in 
1863  is  32.62  per  cent.,  while  in  1862  the  average  on 
dutiable  articles  was  36.20.  Yet,  since  duties  were  stead- 
ily increasing  during  the  war,  one  would  expect  the  rate 
to  be  higher  in  1863  than  in  1862.  The  explanation  must 
be  that  a  number  of  articles  which  before  1863  had  been 
admitted  free  were  subjected  to  rather  low  duties  in  that 
year,  and  caused  a  lowering  of  the  average  rate  on  duti- 
able articles ;  or  that  the  importation  of  goods  charged 
with  high  rates  was  exceptionally  small  in  1863.  Both 
causes  may  have  operated.  It  is  to  be  remembered  that, 
although  the  Morrill  tariff  act  of  1861  went  in  force  for  the 
fiscal  year  ending  June  30,  1862,  the  average  rate  of  that 
year  (36.20  on  dutiable  goods)  does  not  represent  the 
rates  of  the  Morrill  tariff.  During  1861  and  the  early 
parts  of  1862  several  other  tariff  acts  were  passed,  levying 
duties  additional  to  those  of  the  Morrill  act,  and  going 


APPENDIX. 


26l 


into  force  during  that  fiscal  year.  The  effect  of  all  these 
measures  is  seen  in  the  average  rates  for  the  fiscal  year 
1 861-2,  which  consequently  do  not  indicate  the  general 
character  of  the  Morrill  tariff.  The  effect  of  the  ten  per 
cent,  reduction  of  1872  is  clearly  seen  in  the  average  rates 
of  1873  and  the  subsequent  years. 


TABLE  II. 

Duties  on  Some  Important  Articles,  Raised  during  the  War,  and 
Retained  without  Reduction  till  1883. 


Articles. 

Duty  under  the  Morrill 

Duty  of  1864,  in  Force  in 

Tariff  of  1861. 

1883. 

Books 

15  i 

25  % 

Chinaware,  plain    . 

30% 

45% 

Cotton  goods,  not  other- 

wise provided  for     . 

30  % 

35  % 

Cottons,      coarse,       un- 

bleached   .... 

1  ct.  per  yard. 

5  cts.  per  yard. 

Cotton  spool-thread     . 

30% 

6  cts.  per  dozen,   plus 
30  %  (=  60  to  70  %). 

Cottons,  fine  printed  . 

4!  cts.  per  square  yard 

Sj  cts.  per  square  yard 

plus  10  % 

plus  20  % 

Manufactures     of     flax, 

jute,     or     hemp,     not 

otherwise  provided  for 

30  % 

40  % 

Glass,  common  window 

1  to  i|  cts.  per  square 

|  to  4  cts.  per   square 

foot. 

foot. 

Gloves,  of  kid  or  leather 

30# 

$o% 

Bar-iron  ' 

f  ct.  per  ton 

1  to  1^  cts.  per  lb. 

Iron  rails       .... 

$12  per  ton 

$14  per  ton 

Steel,    in    ingots,    bars, 

etc 

1^  to  2  cts.  per  lb. 

2 \  to  3  J  cts.  per  lb. 

Pig  lead 

1  ct.  per  lb. 

2  cts.  per  lb. 

Paper 

30% 

35% 

Silks 

30  # 

60% 

1  On  all  forms  of  bar-iron,  band-,  hoop-,  and  boiler-iron,  on  chains, 
anchors,  nails  and  spikes,  pipes,  etc.,  etc.,  the  duties  of  1864  were  in  force 
till  1883. 


262 


APPENDIX. 


TABLE   III. 
Duties  on  Certain  Articles,  Raised  since  1864  above  the  War  Rates. 


Articles. 


Bichromate  of  potash 
Copper,  ingot     .     . 

Flax 

Marble  in  slabs  .     . 

Nickel 

Steel  rails .... 
Umbrellas      .     .     . 

Wool 

Woollens  : 

Carpets  (Brussels) 

Cloths    .... 

Dress-goods    .     . 

Flannels     .     .     . 


Duty  of  1861. 


3C  lb. 

2C.  lb. 

$15  ton 

30  % 

Free 

30% 

30% 

3c  lb. 

40c.  sq.  yd. 
I2c.  lb.  +  25  % 
12c.  lb. +  25  % 

30% 


Duty  of  1864. 


3C  lb. 

2|c.  lb. 

$15  ton 

50c.  cub.  foot  + 

20  # 

l$% 

45$ 

3S% 

6c.  lb. 


70c.  sq.  yd 
24c.  lb.  +40$ 
24c.  lb.  +40$ 

24c.  lb.  +35$ 


Duty  as  Fixed  in 
1865-70. 


4c.  lb.  (1875) 

5c  lb. 

$20  to  $40  ton 

$1.25    to  $1.50 

cub.  foot +  30$ 

20c.  to  30c.  lb. 

$28  ton 

50  to  60$ 

ioc.  lb.  +  ii# 

44  to  70c.  sq.  yd. 

+  35$ 

50c.  lb.  +  35  % 

6c.sq.yd. +35^ 

8c.  sq.  yd. +40^ 

20  to   50c.  lb.  + 

35  # 


TABLE  IV. 

Revenue  from  Customs  Duties,  and  Internal  Revenue,  1861-1883. 

(00,000  omitted.) 


Year. 

Internal  Revenue. 

Customs  Revenue. 

1861 

None. 

39-6 

2 

" 

49.1 

3 

37-6 

69.1 

4 

109.7 

102.3 

5 

209.5 

84.9 

6 

309.2 

179.0 

7 

266.0 

176.4 

8 

191. 1 

164.5 

9 

158.4 

180.0 

1870 

184.9 

194-5 

1 

143. 1 

206.3 

2 

130.6 

216.4 

3 

II3.7 

188.1 

4 

102.4 

163.1 

5 

110.0 

157.2 

6 

116.7 

148. 1 

7 

118. 6 

131.0 

8 

110.6 

130.2 

9 

113. 6 

137-2 

1880 

124.0 

186.5 

1 

135-3 

198.2 

2 

146.5 

220.4 

3 

1                144.7 

214.7 

APPENDIX. 


263 


TABLE  V. 

Production,  Imports,  and  Exports  of  Copper,  and  Foreign  and 
Domestic  Prices. 

(Quantities  in  gross  tons.) 


Imports. 

Price  per  lb.  in  cents.   | 

Domestic 
Product'n. 

Ex- 
ports. 

Vear. 

Copper  in 

Copper 

New  York 

London 

in  Price. 

Pigs. 

Ore. 

LakeCop'r. 

Chili  BarsJ 

1375 

l8,0OO 

4*5 

2,300 

2,280 

23 

18 

5 

6 

19,000 

777 

910 

6,430 

21.5 

16.5 

5 

7 

2I,OCO 

750 

15 

6,050 

19 

14.6 

4-4 

8 

2r,5oo 

165 

399 

5,040 

16.5 

13-5 

3 

9 

23,000 

70 

IOO 

7,680 

17.5 

12.2 

5-3 

1880 

27,000 

2,350 

2,000 

1,880 

20 

13-5 

6.5 

1 

32,000 

320 

4,420 

2,l6o 

18,5 

13-3 

5-2 

2 

41,000 

334 

8,190 

1,490 

18.7 

14.4 

4-3 

3 

52,000 

148 

5001 

3,890 

16. 1 

13.7 

2.4 

4 

63,500 

65 

980 

7,610 

13.7 

11. 8 

1.9 

5 

74,000 

35 

1,630 

19,900 

II 

9-5 

15  m 

6 

70,000 

18 

1,840 

10,850 

II 

8.8 

2.2  1* 

fitfMtoJ 


Figures  are  from  "  Mineral  Resources  of  the  United 
States,"  pp.  214,  et  seq.  The  production  is  for  the  calen- 
dar year,  the  imports  and  exports  for  the  fiscal  year  (end- 
ing June  30th).  The  annual  average  prices  are  from  the 
monthly  prices  given  in  "  Mineral  Resources."  The  fig- 
ures given  in  "  Mineral  Resources"  seem  to  contain  con- 
siderable understatements,  so  far  as  exports  are  con- 
cerned.    See  Eng.  and  M in.  Journal,  Jan.  26,  1884,  p.  59. 

These  tables  show  the  price  in  New  York  to  have  been 
higher  than  that  in  London  by  from  \%  to  5 J  cents.  In 
recent   years  the  great   increase  in  domestic  production 


1  Beginning  with  1883,  this  column  states  the  quantity  of  copper  con- 
tained in  imported  ore,  not  the  gross  amount  of  ore.  The  8, 190 tons  of  ore 
imported  in  1882  contained  about  600  tons  of  copper. 


264 


APPENDIX, 


has  forced  down  the  price  here,  and  the  difference  in  price 
is  not  more  than  ij  cents.  The  better  quality  of  domestic 
Lake  copper  would  cause  it  to  bring  \\  cents  more  tnan 
Chili  bars  under  any  circumstances.  Cost  of  transporta- 
tion (from  London  to  New  York)  is  insignificant.  It  is 
safe  to  say  that  any  difference  in  price  over  and  above  \\ 
cents  per  pound  could  not  exist  if  it  were  not  for  the 
duty  on  copper. 

TABLE   VI. 

Production,  Imports,  and  Foreign  and  Domestic  Prices  of  Besse- 
mer Steel  Rails. 


Year. 

'   Product  in 

Imports  into 

Average  Price 

Average  Price 

Average 

U.  S.1 

U.  S.1 

in  U.  S.2 

in  England.'2 

Difference 

in  Price. 

1871 

38,300 

not  given 

91.70 

57-70 

34- 00 

2 

94,000 

150,000 

99.70 

67.30 

32.40 

'3 

129,000 

160,000 

95»9° 

74.40 

21.50 

4 

145,000 

101,000 

84.70 

57-50 

27.20 

5 

291,000 

18,000 

59-70 

44.10 

15.60 

6 

412,000 

none 

53.io 

37.70 

15.40 

7 

432,000 

" 

43.50 

31.90 

11.60 

8 

550,000 

" 

41.70 

27.20 

14.50 

9 

684,000 

25,000 

48.20 

24.70 

23-50 

1880 

954,000 

158.000 

67.50 

36.OO 

31.50 

1 

1,330,000 

249,000 

61.10 

31.20 

29.90 

2 

1,438,000 

lS2,000 

48.50 

30.00 

18.50 

3 

1,286,000 

3S,2oo 

37-75 

25.40 

12.35 

4 

1,119,000 

3,000 

30.75 

22.90* 

7.85 

5 

1,079,000 

2,400 

28.50 

23.65 

4.85 

6 

1,769,000 

46, 500 

34.50 

20.65 

13.85 

7 

2,295,000 

154,000 

37-IO 

20.65 

16.45 

The  figures  of  production  and  importation  are  from  the 
Reports  of  the  American  Iron  and  Steel  Association,  as 
are  also  those  of  prices  in  this  country.     The  prices  in 


In  net  tons  of  2,000  lbs. 


Price  per  gross  ton  of  2,240  lbs. 


APPENDIX.  265 

England  have  been  compiled  from  the  files  of  the  London 
"  Economist,"  checked  by  occasional  tables  in  the  Iron  and 
Steel  Association  Reports  (e.  g.,  in  "  Report  for  1879,"  P- 
63).  Prices  by  yearly  average  necessarily  indicate  only 
the  general  fluctuations  ;  but  for  purposes  of  general  com- 
parison the  above  are,  I  believe,  trustworthy. 

Cost  of  transportation  varies  from  two  to  four  dollars 
per  ton.  The  difference  in  price  over  and  above  this  sum 
represents  the  effect  of  the  tariff  tax.  It  will  be  noticed 
that  in  the  years  of  activity  (e.  g,  in  1871-72,  and  in 
1880-81)  the  difference  in  price  is  fully  equal  to  the  duty, 
which  was  $28.00  per  ton  till  1883.  ^n  years  of  depression 
the  difference  in  price  is  much  less  than  the  duty  (e.  g.,  in 
1875-78),  and  at  such  times  importation  ceases.  In 
1886,  when  the  duty  was  $17.00  per  ton,  the  price  in  this 
country  was  higher  than  that  in  England  by  about  $14.00; 
under  such  circumstances,  importation  must  evidently 
cease,  the  duty  being  prohibitory. 


266 


APPENDIX. 


TABLE  VII. 


Changes  of  Duty  in  1883. 


Article. 

Duty  before  1883. 

Duty 
Recommended  by 

Duty  of  Act  of 

1883. 

Tariff  Comm. 

Barley 

15c.  bushel 

15c 

IOC. 

Copper,  ingot 

5c  lb. 

4c. 

4c 

Cottons,  coarse,  . 

5c.  sq.  yd. 

3c 

2^C. 

11         finer  printed 

5^  sq.  yd. and  20$ 

6c. 

6c. 

"         mf.  n.  0.  p. x 

35  % 

4°% 

40% 

Files2          .         .      j 

6  to  ioc.  lb.  and 

30  % 

35c.  to$2.5odoz. 

35c.  to  $2.50 

Iron  ore 

20  % 

50c.  ton 

75c. 

"    P%      •         • 

$7.00  ton 

$6.72 

$6.72 

"    bar 

ic.  lb. 

Ac.  lb. 

tV- 

Linens,  finer 

40$ 

35$ 

35  # 

Manufactures  of  iron, 

brass,  lead,  pewter, 

tin,  etc.  . 

35$ 

45  % 

45  # 

Marble,  block     .      -j 
Nickel 

50c.  cub.  ft.  and 
20$ 

75c.  cub.  ft. 

65c.  cub.  ft. 

20  to  30c.  lb. 

25c.  lb. 

15c.  lb. 

Quicksilver 

free 

10  # 

10  # 

Rice,  uncleaned  . 

2C.  lb. 

i|c. 

lie. 

Silks  . 

60  f 

50^ 

50  # 

Steel,  in  ingots3  . 

i\  to  3Jc.  lb. 

2  to  3^C. 

2  to  3^c. 

Wool,  value  under  32c. 

ioc  lb.  and  11  % 

IOC. 

ioc. 

Woollens,  dress  goods4 

j  6c.  yd.  and  35$ 
"j  8c.    "     "  40$ 

5c  and  35  % 
12c.  and  40  % 

5c.  and  35  % 
9c.    "     40$ 

"        cloths  . 

50c.  lb.  and  35  % 

j  30c.  and  35  % 
I  35c.     "    40% 

35c.  and  35  % 
35c.    "     40% 

Flannels,       blankets, 
etc. 

j  20   to    50c.  lb. 

1        and  35  % 

8  to  24c.  and  35  % 

10    to    24c.    and 

35$ 

1  Manufactures  not  otherwise  provided  for,  embroideries,  laces,  trimmings 
etc.,  see  p.  237.     2  See  p.  240.     3See  p.  239.     4See  p.  235. 


INDEX. 


Ad-valorem  duties,  159 
Ad-valorem  duty  on  woollens,  207 
Agricultural  products,  duties  on,  253 

Bar-iron,  duty  of  1883,  248  ;  duty  in 

1864-1883,  261 
Blankets,  duty  of  1867,  205,  214  ;  of 

1883,  246 

Carpet  wool,  duty  of  1867,  201  ;  of 

1883,  243 
Charcoal  iron,  54,  131 
Clay  and  the  tariff,  74,  85,  96 
Coal  duty  reduced,  1872,  185 
Coffee,  free  in  1846,  114  ;  duty   re- 
duced, 179  ;  repealed,  183  ;  policy 

of,  186 
Colonies,  industrial  state  of,  8 
Combing      wool,     imported      from 

Canada,  150  ;  duty  in  1867,  212 
Compensating  system,  196 
Compromise  tariff  of  1833,  no 
Conference   committee  on   tariff  of 

1883,  233 
Copper,  duty,  219,  250  ;  statistics  on, 

263 
Cotton  goods,  duty  of  1816,  30;  of 

1864,  193  ;  of  1883,  236,  247 
Cotton  manufacture,  1789-1824,  25; 

under  tariff  of  1833,  134  ;  of  1846, 

139 


Crisis,  of  1818,  20,  69,  74  ;  of  1837, 
116  ;  of  1857,  118 

Dawes  on  tariff  of  1872,  182,  185 

Files,  duty  of  1883,  239 

Finkelnburg  introduces  bill  of  1872, 
182 

Flannels,  duty  of  1867,  205,  214  ;  of 
1883,  246 

Flax,  duty  of  1828,  90,  105  ;  in- 
creased in  1870,  227 

Frelinghuysen  on  copper  act  of 
1869,  220 

Foreign  trade,  1792-1815,  n  ;  after 
1816,  20,  23  ;  under  tariff  of  1846, 
121 

Garfield  on  tariff  in  1870,  178 

Harris,  E.,  on  woollen  duties,  199 
Harrisburg  convention  of  1827,  83 
Hayes,  J.  L.,  on  act  of  1872,    183, 
189  ;  President  of  Tariff  Commis- 
sion  of    1882,    231  ;   on   tariff  of 
1883,  254 
Hemp,  protected  in  1789,  15  ;  duty 
of  1828,  90, 105;  duty  discussed,  90 
Hides  admitted  free,  185 
Home  market  argument  after  1S18, 
67,  70 


267 


268 


INDEX. 


Horizontal  reduction,  in,  189,  255 
Hosiery  manufacture  before   i860, 
148 

Imports    and    exports,     1791-1814, 

12,  23 
Imports,  1860-1886,  259 
Internal  revenue  acts  of  1862  and 

1864,  161,  165 
Internal  taxes  repealed,  172 
Iron  manufacture,   in  the  colonies, 

47  ;  1789-1838,  49  ;  underacts  of 

1842  and  1846,. 129 
Iron  duties  of   1816,  50  ;  of   1818, 

51  ;  of  1824,  52  ;  of  1828,  52,  89  ; 

of   1846,    124 ;  of   1870,  179  ;  of 

1883,  247 
Iron  ore  duty,  238 
Iron  rails  free  in  1833,  56 

Jackson    party    and    the    tariff    of 

1828,  85 
Jefferson  on  protection,  14 

Lowell  founded,  32 

Madison  on  protection,  14 

Mallory  and  the  tariff  of  1828,  83,  87 

Marble  duty,  1864-1870,  224  ;  1883, 

251 
Metal  manufactures,  duty  of   1883, 

240 
Minimum   duties,  of  18 16,  30,  76 ; 

proposed  in  1820  and  1824,  77  ; 

in  1827,  80,  83 ;  in  1828,  93,  103  ; 

discussed,  81,  104 
Molasses  duty  of  1828,  93,  100 
Morrill,  J.  S.,  on  tariff  of  1861,  160; 

of   1864,    165,    173  ;    on    marble 

duties,  225 


Morrison,  bill  of  1876,  191  ;  of  1884. 
1886,  255  ;  on  act  of  1883,  233 

Nickel  duty,  227,  251 

Pig  iron,  see  iron 
Politics  and  the  tariff  of  1828,  84 
Power  loom  introduced,  31,  42 
Protection  to  young  industries,  argu- 
ment  for,   1  ;  essential   objection 
to,  186 
Protection  feeling,  in  1789,  14,  68  ; 
after  1808,  17  ;  in  1816,  18.  68  ; 
strong  after  1818,  23,  69  ;  declines 
after  1832,  64,  106  ;  in  New  Eng- 
land, 71  ;  in  West,  70  ;  after  the 
civil  war,  173,  19Q 

Quicksilver  duty  in  1883,  240 

Reed  rule  in  1883,  232 

Revenue,     duties    abolished,    189 ; 

from  customs  and  internal  taxes, 

262 
Rice,  A.  H.,  on  tariff  of  1861,  150 
Rolled  bar  iron,  discriminating  duty 

on,  50,  52,  126 ;  first  made  in  U. 

S.,  132 

Salt  duty  reduced,  185 
Seward  on  tariff  of  1857,  115 
Sherman,  on  tariff  of  1861,  160  ;  on 

tea  and  coffee  in  1875,  190 
Silks,  duty  in  1883,  252 
Sinking  fund,  190 
South  against  protection  after  1820, 

73 
Specific  duties,  under  act  of  1833, 

in  ;  in  1861,  159 
Steel  duty,  1883,  238 


INDEX. 


269 


Steel   rails,    duty  of   1870,  221  ;  of 

1883,  248  ;  statistics  on,  264 
Syracuse  convention  of  1865,  198 

Tariff  act,  of  1789,  14  ;  of  1816 ;  18, 
68  ;  of  1824,  74  ;  of  1828,  89  ;  of 
1832,  103,  no  ;  of  1833,  in  ;  of 
1842,  113  ;  of  1846,  114,  156  ;  of 
1857,  115,  157  ;  of  1861,  158  ;  of 
1862,  162  ;  of  1864,  164  ;  of  1870, 

178  ;  of  1874,  185  ;  of  1875,  190  ; 
of  1883,  233,  253,  266 

Tariff  bill,  of  1820,  70,  72  ;  of  1827 

(woollens),  80;  of  1867,   175;  of 

1872,    182  ;  of   1876,   1878,   191  ; 

of  1882,  266  ;  of  1884,  1886,  255. 

Tariff  commission  of  1882,  231 

Tea,  free  in  1846, 114  ;  duty  reduced, 

179  ;  repealed   1872,  183  ;  policy 
of,  186 

Ten  per  cent,  reduction  of  1872, 
183,  190 

Van  Buren  and  tariff  of  .1828,  96, 

IOO,   IOI 


Walker,   R.  J.,  and  tariff  of    1846, 

114 
War  finances,  161,  177 
Webster  and  tariff  of  1828,  100,  101 
Wells,    D.    A.,    on    internal  taxes, 

164  ;  prepares  bill  of   1867,  176  ; 

on  copper  veto  of  1869,  220 
Wharton,  J.,  on  nickel  duty,  227 
Wheat,  exports  of,  1803-1820,  23 
Wood,  F.,  introduces  bill  of    1878, 

191 
Wool,  cheap,  admitted  at  low  rates, 

91 

Wool  and  woollens,  duties  of  18 16, 
40,  75  ;  of  1824,  40,  75  ;  of  1828, 
91,  93  ;  of  1832,  103,  105  ;  of 
1846,  114  ;  of  1857,  150  ;  of  1861, 
195  ;  of  1864,  197,  198  ;  of  1867, 
201,  203  ;  of  1883,  236,  242,  245 

Wool  duty  in  England  repealed, 
1824,  79 

Woollen  dress  goods,  duty  of  1883, 

234 
Worsted  manufacture,  148 
Wright,  Silas,  on  tariff  of  1828,  96 


Wages  argument  appears  about  1840, 
65 


Young  industries  argument,  I 


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